Mortgage rates edge downward slightly this week

Interest rates for buying a home on the Palos Verdes Peninsula stayed steady this week but the rate of increases is slowing and may decline slightly next week. The following are excerpts from the newsletter on interest rates published by HSH Associates :

“Mortgage rates rising in the 15 of the last 18 weeks coupled with steadily rising home prices are combining to make this a pretty quiet spring homebuying season. The average rate for the benchmark 30-year FRM edged higher again this week and has now risen by three quarters of a percentage point since last Thanksgiving.

As you might expect, this has literally crushed refinancing activity; according to the Mortgage Bankers Association, applications to refinance a mortgage have fallen to an 18-year low. However, given pretty solid economic and demographic fundamentals, rising rates weren’t supposed to have all that much effect on sales of homes, and likely wouldn’t, except that they have also come after years of steadily rising home prices.

To be fair, the tempering of existing home sales can also be attributed to a lack of supply of available and desirable homes to buy. However, but supply’s not so much the issue for new homes, where inventory can be added, but where higher starting costs and higher rates challenge affordability to an even greater degree.

The Fed expressing comfort with a greater level of inflation and not considering a stronger or faster policy response soothed the markets, and the underlying yields that influence mortgage rates declined measurably as the week progressed. The decline wasn’t reflected in this week’s Freddie Mac survey, but it will show up next week.

With the federal funds rate perhaps halfway to its terminal point (or at least closing in on it soon) the Fed is also looking to change the messaging it uses to describe the stance of monetary policy, so we’ll be watching for how their characterization of the position of interest rates changes in the coming months (perhaps as soon as next month).

After weeks of headlines of “Higher mortgage rates!”, there is a good chance that we’ll see a meaningful decline next week. The Fed’s unconcerned stance about even higher-than-desired inflation took a little edge out of interest rates for at least the moment. As well, some slowing in growth in the Eurozone and in Japan, a softening of oil price and other considerations also helped to press the yield on the influential 10-year Treasury down from about 3.07% to about 2.93% by the close of the week. A 14-basis point move is considerable, but not all of that passes down to mortgage rates… but some is likely to.

Memorial Day Monday means the unofficial start of summer… and the unofficial end of the spring homebuying season. April housing market wasn’t much to get excited about and odds favor that May won’t be either. As far as rates go, a little dip can be expected next week, perhaps enough to erase the five-basis point increase Freddie Mac reported this week or even a bit more”

The following are interest rate quotes from John Alvin of American California Financial:

30 Yr Fixed FHA
Rate     APR
4.000 5.141

Conforming 30 Yr Fixed up to $453,100
Rate    APR
4.500 4.624

Conforming Jumbo 30 Yr Fixed $453,101 – $679,650
Rate    APR
4.750 4.864 D

Jumbo 30 Yr. to $1.5 Mil
Rate     APR
4.500 4.596

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate    APR
4.000 4.562

For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

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Interest rates decline slightly

Interest rates for buying a home on the Palos Verdes Peninsula stayed steady this week but the rate of increases is slowing. The following are excerpts from the newsletter on interest rates published by HSH Associates :

“It would be hard to characterize a four basis point decline in the average 30-year fixed rate mortgage as meaningful, but the dip in rates this week was the largest since the turn of the year, so it’s at least notable, if nothing else.

The factors that produced the 2018 run-up in mortgage rates are all still largely in place, so the odds of a continued or substantial decline are still quite small. Tempering of the 2018 tendency for rates to climb comes in the form of highly-volatile stock markets, which continue to see investors looking for places to shelter cash, and some unexpected appetite among foreign investors for U.S.-backed debt.

With the economy humming, the Federal Reserve committed to a upward path for short-term interest rates (regardless of the actual number of moves that come this year) there is little likelihood that mortgage rates will decline by much from these levels. The influential 10-year Treasury put in a fairly volatile week, swinging from the low 2.70s to the low 2.80s before ending the week in the upper 2.70s range. Despite this, secondary market mandatory yields barely budged all week, so there appears to be a little disconnect between two correlated markets at the moment.

Mortgages and Treasuries serve different investors and liquidity profiles and risks of each are rather different. While yields and rates will generally move in tandem, it’s not correct to think they move in exact lockstep fashion. This is where we find ourselves at the moment, with highly volatile stock and bond markets but relative calm in mortgages, and that’s likely where will be come next week. There is slight downward pressure on rates as we write this late Friday, but it may or may not hold by the time Freddie Mac releases its survey results next Thursdaymorning. We think that a single basis point decline — perhaps two — is all that the volatility in Treasuries will be able to impart into mortgages next week.”

The following are interest rate quotes from John Alvin of American California Financial:

30 Yr Fixed FHA
Rate APR
3.750 4.887

Conforming 30 Yr Fixed up to $453,100
Rate APR
4.375 4.498

Conforming Jumbo 30 Yr Fixed $453,101 – $679,650
Rate APR
4.500 4.612

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.375 4.471

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
4.000 4.562

POSTED BY
For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

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Short term rates rise, long term interest rates steady

Interest rates for buying a home on the Palos Verdes Peninsula stayed steady this week but the rate of increases is slowing. The following are excerpts from the newsletter on interest rates published by HSH Associates :

” As expected, the Federal Reserve decided to raise its key short-term policy rate this week, lifting the federal funds rate by another quarter of a percentage point to a range of 1.5% to 1.75%. The impact on mortgage rates is negligible, if any, but odds favor some upward pressure on ARMs in the days ahead. Fixed-rate mortgages have little direct relationship to the federal funds rate, responding instead to inflation, economic growth and the expected future path for interest rates moreso than their present stance.

The Fed has now raised short-term interest rates six times in this upcycle for a total move so far of about 1.5 percentage points, but it is still an open question as to whether two more increases or three will come this year. With the close of Wednesday’smeeting, updated projections by Fed members suggested nearly an even split in this regard, with 7 members expecting three (or more) more increases, while 8 think just two more (or less) will be the likely outcome for the rest of the year. That more members weren’t “hawkish” (that is, favoring higher rates) soothed the markets to a degree, and longer-term rates settled somewhat after these projections were released.

That long-term interest rates appear to have at least paused for the moment is important for the spring housing season, now just getting its legs under it. The run-up in 30-year fixed mortgage rates in January through earlier this month added about a half percentage point to where we began the year, and although unwelcome, should not seriously crimp affordability. With a $250,000 loan amount, the difference in monthly payment between an interest rate of 3.95% (Jan 4) and 4.45% (Mar 22) is $71.96 — not nothing, as the saying goes, but probably not a deal breaker for most potential homebuyers.

We don’t think that the downdraft in Treasury yields at the end of this week will have all that much effect when Freddie Mac reports next Thursday. At the moment, there is a chance for a small decline in rates of a couple of basis points for fixed-rate products, but that’s about all. We’ll hedge a bit; call it unchanged with a bias towards a slight decline for the average conforming 30-year FRM Freddie reports next week.”

The following are interest rate quotes from John Alvin of American California Financial:

30 Yr Fixed FHA
Rate APR
3.875 5.014 Details

Conforming 30 Yr Fixed up to $453,100
Rate APR
4.375 4.498 Details

Conforming Jumbo 30 Yr Fixed $453,101 – $679,650
Rate APR
4.625 4.738 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.375 4.471 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.875 3.806 Details

POSTED BY
For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

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Interest rates move up

Interest rates for buying a home on the Palos Verdes Peninsula moved up a bit this week . The following are excerpts from the newsletter on interest rates published by HSH Associates :

“Bond markets exhibited a little bit of nervousness this week, and as is often the case, mortgage rates are firming as a result. The ongoing accumulation of solid economic news both ere and abroad plus some new concerns about inflation were enough to unsettle investors who have come to enjoy the reliability of low inflation and global central bank support.

There continue to be signals that the long run for extraordinary quantitative easing is coming to an end soon. The U.S. has already started down a path of undoing its programs, and in fact is accelerating the process this month.

The influential yield on the 10-year U.S. Treasury moved above decisively above the 2.5 percent mark and ran close to 2.6 percent for a time before settling back a little as the week came to a close, but the latest bump in yields should be sufficient to push conforming 30-year FRMs over the 4 percent mark for the first time since last July.

It bears noting that mortgage rates would have already cracked the 4 percent mark, but the “spread” over the 10-year Treasury has shrunk notably since a near-term mortgage rates bottom last September. Since then, the 10-year TCM has risen from a weekly average of 2.07 percent to about 2.5 in the latest week, a rise of 43 basis points. The average conforming 30-year FRM reported by Freddie Mac moved up less than half this, rising 21 basis points from 3.78 percent in September to 3.99 percent this week. Spreads have shrunk from 171 basis points to just 149, about a dozen fewer than is typically seen, so not all of the increase in yields is being passed along to mortgage borrowers. Most likely, this is due to pricing competition among lenders trying to keep volumes up as refinancing activity dwindles due to higher rates. However, as will all things, there are limits, and we may be at or close to them, so any lift in yields becomes more likely to be passed along to borrowers

We were bound to see 30-year mortgage rates trek over the four percent line at some point, and it appears that we have reached that point. Be prepared for “mortgage rates at highest point since July”-type headlines next week, as we think we’ll see a five or six basis point increase in the averages Freddie Mac will report. In the excitement, it’s a good idea to keep in mind that rates were above 4 percent for fully 20 weeks of 2017, so it’s not like we’re entering uncharted waters.”

The following are interest rate quotes from John Alvin of American California Financial:

30 Yr Fixed FHA
Rate APR
3.500 4.633 Details

Conforming 30 Yr Fixed up to $424,100
Rate APR
4.000 4.120 Details

Conforming Jumbo 30 Yr Fixed $424,101 – $636,150
Rate APR
4.250 4.361 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.250 4.345 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.750 3.747 Details

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Mortgage Interest Rates rise slightly

Interest rates for buying a home on the Palos Verdes Peninsula remained level this week . The following are excerpts from the newsletter on interest rates published by HSH Associates :
“Largely backing and filling for almost all of the fall so far, 30-year fixed mortgage rates turned this week again to filling, with a small rise all but taking back two small declines over the past two weeks. While shorter-term mortgages such as 15-year FRMs or 5/1 ARMs have seen their rates leg higher during that period (to eight-month and more than six-year highs, respectively) 30-year FRMs have largely tread water, wobbling in a very narrow range, and haven’t topped the 4 percent mark since a one-week flare back in July.
With the economy solid, the Fed reducing its balance sheet and poised to raise short-term rates another notch this coming week, it may not be long before the most popular U.S. mortgage more routinely features average rates with a “four handle”. To be sure, it wouldn’t take much of a bump from here to break over that threshold.

The year is rapidly coming to a close and there is a chance we won’t crack the 4 percent mark for mortgages before it ends. That said, we’re pretty close right now, just a handful of basis points below that level. The influential interest rates which underlie mortgages have been generally steady to firmer in the last couple of days, and with the Fed on tap for a move mid-week, we are likely to nudge a little closer to the “psychologically important” 4 percent breakpoint. With the rate hike already “baked in”, any additional upward bump will have to come as a result of a measurable or notable change in policy outlooks, released as part of the “dot plots” that will accompany the close meeting. With six months of 3 percent plus growth in GDP, we think there is a chance that a member or two might have lifted their expectations for the coming year.
Of course, Freddie Mac’s weekly survey will have largely been completed by late-day Wednesday, so any additional kicker for rates would not show until another week has passed. For now, we think that we’ll see a two or three basis point increase in the average offered conforming 30-year FRM rate when Freddie reports next Thursday.”

The following are interest rate quotes from John Alvin of American California Financial:
30 Yr Fixed FHA
Rate APR
3.375 4.506

Conforming 30 Yr Fixed up to $424,100
Rate APR
3.875 3.994

Conforming Jumbo 30 Yr Fixed $424,101 – $636,150
Rate APR
4.125 4.235

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.125 4.219

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.625 3.688

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Mortgage rates remain steady

Interest rates for buying a home on the Palos Verdes Peninsula remained level this week . The following are excerpts from the newsletter on interest rates published by HSH Associates :

“In the aftermath of a very noisy week for financial markets came a rather quieter period, at least in terms of fresh data and changes atop the Federal Reserve are concerned. At the moment, its potential changes to the U.S. tax code that are garnering the most attention. As seems to regularly be the case in politics these days, there’s not much by way of consensus, and so the coming days and weeks are sure to see some battles in Congress. There is a hoped-for goal to get a deal in place by the end of the year, but with many differences to reconcile that may not come to pass.

The prospects of economy-boosting stimulus being delayed being somewhat lessened by the competing proposal from the House and Senate helped interest rates to settle back a little bit in recent days. Without markets being able to develop a sense not only of what is coming but when it may come, it’s reasonable to think that we’re in for a bit longer period of moderate growth rather than a imminent speed up, so interest rates had a little space to settle as a result.

Depending on what comes, we may see effects on mortgage rates, home prices, the mortgage interest deduction and more, but there’s little to say about any of these until the dust settles.

While we still are likely to see somewhat higher mortgage rates at some point, the trend remains mostly a muted one. The Fed’s gradual reduction of its bond holdings is underway with little fanfare or effect on rate (so far), but another lift in short-term rates is likely just a few weeks away and we will probably see a little firmness as we turn the corner into December. However, absent any significant inflation concern, it will remain hard for rates to get much upward traction, dragged down as they are by a world that is still employing QE-style policies. In this situation, comparatively high U.S. bond yields remain an attractive opportunity for foreign investors faced with rock-bottom local yields, and every time rates here edge higher, it’s to be expected that fresh money comes after them, which in turn pushes them back down to a degree. Ultimately, when more bonds become available as the Fed steps away from the market more quickly higher yields may become more sticky, but for the moment, this is simply not the case.

A fairly quiet week last week for interest rates, but things will pick up a bit data-wise this week. Mortgage rates really have little upward traction and any that does seem to form (as we saw in September and into October) just doesn’t seem to have staying power. Backing and filling seems to be the order of the day, but our expectation is that we’ll generally notch our way higher as we go. In reviewing the trend for last week there’s not much to see, so odds favor perhaps an increase of a couple of basis points in the average conforming 30-year fixed rate reported by Freddie come this Thursday”

The following are interest rate quotes from John Alvin of American California Financial:

30 Yr Fixed FHA
Rate APR
3.375 4.506 Details

Conforming 30 Yr Fixed up to $424,100
Rate APR
3.875 3.994 Details

Conforming Jumbo 30 Yr Fixed $424,101 – $636,150
RateAPR
4.125 4.235 Details

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.125 4.219Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.750 3.747 Details

POSTED BY
For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

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Interest rates go down slightly to near 2017 lows

Interest rates for buying a home on the Palos Verdes Peninsula eased this week . The following are excerpts from the newsletter on interest rates published by HSH Associates

“Partly due to increasingly bellicose saber-rattling between the U.S. and North Korea, but also more than partly due to inflation that simply can’t find a reliable toe hold, mortgage and other interest rates found new reasons to decline this week. With this as the backdrop, it seems likely that we’ll set new 2017 lows for mortgage rates in the days ahead, possibly beating previous lows by a few basis points. This is remarkable, given that the Fed has raised the federal funds rate three times in the last eight months.

To be fair, the fed funds rate and mortgage rates don’t have a whole lot to do with one another, but a central bank tightening policy is usually done to try to attenuate above-trend growth or inflation. In this instance, neither has been the case, so it has been just a not-so-routine removal of excess accommodation, a process of removing emergency-level supports that the economy simply doesn’t need, with these moves having very little overall effect on economic or labor market growth to date.

Odds favor that we will see a different kind of excess accommodation removal beginning in a few weeks with what is expected to be the onset of the Fed starting the protracted process of trimming its balance sheet. Analysts have come to expect that this will come at the expense of another lift in the federal funds rate, and odds of a lift in the fed funds rate in September are currently reckoned at about zero. The process of the Fed recycling fewer funds into mortgages and Treasuries will slowly increase in impact over time, but there currently are few expectations that this will disturb financial markets (or raise rates) very much, at least at the onset.

 

That said, the Fed has been expected to kick the next rate hike down the road to December’s meeting, but there have been no demonstrably durable acceleration in economic growth yet, and already-limited inflation pressures have faded over the last few months. Couple this with expectations for near-term fiscal policy changes to goose growth all but absent from the market, odds makers in the futures markets put the chance of a December move by the Fed at only about one-in-three.

With plenty of political trouble, only moderate domestic (and global) growth to be seen and no imminent inflation threat, interest rates simply have little reason to rise.

Mortgage rates seem poised to slip again next week, but probably not by very much. That said, as this week’s average conforming 30-year FRM as reported by Freddie Mac was only two basis points above 2017 lows, it’s likely that we’ll see “new lows for mortgage rates!” headlines when Freddie reports again next Thursday. We think a 2-4 basis point decline is what we’re likely to see in that benchmark, little more than statistical noise but enough to generate a little mid-summer excitement.”

 

 

The following are interest rate quotes from John Alvin of American California Financial:

30 Yr Fixed FHA
Rate APR
3.250 4.379 Details

 

Conforming 30 Yr Fixed up to $424,100
Rate APR
3.750 3.869 Details

 

Conforming Jumbo 30 Yr Fixed $424,101 – $636,150
Rate APR
4.000 4.109 Details

 

Jumbo 30 Yr. to $1.5 Mil
Rate APR
3.875 3.968 Details

 

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
3.375 3.570 Details

For additional information, go to my website http:www//www.maureenmegowan.com 

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