Mortgage interest rates remain flat

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

” You probably wouldn’t know it, given all the “rising mortgage rates” headlines of the spring, but the reality is that mortgage rates have been fairly stable now for weeks. In fact, that’s been much the case overall since the end of April, when they cruised past the 4.5 percent mark. In the nine-week period since then, 30-year FRMs have held in just a 12-basis point slot with about as many weeks of decline as increase, and that despite an active Fed and faster economic growth and inflation.

Although it’s rather too soon to call it, but as we’re now at the start of summer, there seems a good chance that the summer doldrums for rates may start early this year.

For reasons hard to reckon, it just feels to us as though the factors that drove mortgage rates higher in the early part of the year faded to some degree in the last couple of months and continue to wane at the moment. This isn’t to suggest that mortgage rates are likely to fall; on the contrary, they are still much more likely to rise than decline, but there just doesn’t seem to be the same degree of upward pressure at the moment as there was in January, or March, or even May, for that matter. It simply feels as though a directionless period for rates has formed, and it isn’t clear what might cause a break higher if current influences can’t seem to make that happen.

As such, we think that rates will only wobble in place next week, with the average conforming 30-year FRM reported by Freddie Mac moving probably just a basis point or two, probably up.”

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

30 Yr Fixed FHA
Rate APR
4.000 5.141 Details

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

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

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.625 4.722 Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
4.000 4.562 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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Mortgage interest rates move down slightly again

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 :

” In recent weeks we’ve seen a number of economic conditions that have helped mortgage rates reverse course, at least a little. Of course, shaving about an eighth of a percentage point off a 61 basis point rise in 2018 isn’t much of a retreat, but homebuyers and even some refinancers in the market welcomed the chance at a slightly lower rate in the last couple of weeks.

A few factors have contributed to this minor decline: The Fed has so far expressed a willingness to let inflation run a little warmer than they would prefer for a time without a stronger policy response; oil prices have settled back for several weeks in a row after steadily rising for about three months, quelling concerns of faster inflation; trade and tariff issues plus unsettled politics and stumbling economies outside the U.S. have seen investors express their concerns by plowing money into the shelter of U.S.-backed bonds, driving yields down and pulling mortgage rates down along with them.

With the U.S. economy seemingly firing on all cylinders at the moment, and inflation at or perhaps now moving above its preferred target, the Federal Reserve will meet on Tuesday and Wednesday, with the expected outcome of the meeting including a lift in the Federal Funds rate. At the same time, Fed members will release updated expectations about near and far-term economic growth and inflation and projections for the future path of interest rates. While the expected interest-rate increase is “baked in” to today’s mortgage rates (futures markets place a 92% chance of the move), what isn’t known and will likely move the markets is whether the outlook for the rest of the year will suggest if two (or only one) additional rate hike can be expected. Members were split about 50-50 in March, and if more have moved into the “two move” camp we could see mortgage rates start heading back up before long.

 

 

 

Strong economic conditions, an active Fed and inflation chugging its way higher over time should be ingredients for higher interest rates and firming mortgage rates. However, as has been the case at times since the Great Recession, influences from other parts of the world have helped to keep them tethered or even pull them lower for a time. These transient influences are important for homebuyers and even refinancers as they get short windows to capture lower rates if they can move quickly, but the greater trend for now continues to suggest higher rather than lower rates as we go.

The Fed needs to continue along its path of raising rate if it hopes to be able to conventionally combat the next recession by lowering interest rates. In recent weeks, a consortium of economists are forecasting that the next recession may be as close as 18 months away, a sentiment echoed by none other than former Federal Reserve Chairman Ben Bernanke this week. A year and a half from now is a long way off, a lot can happen between now and then, and long-range forecasts of anything aren’t particularly trustworthy.

Neither are short range ones, for that matter. Last week we called for a five-basis point rise in the average conforming 30-year FRM as posted by Freddie Mac and instead got slapped by a two basis point decline. At the moment, the underlying current for rates is slightly firmer, but next week’s data and central bank activities suggest to us that some of the 12 basis point cumulative decline in rates is bound to go. As such, we expect a 3-4 basis point increase in the benchmark 30-year FRM when next Thursday’s report comes.”

 

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

 

30 Yr Fixed FHA
Rate APR
4.000 5.141 Details

 

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

 

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

 

Jumbo 30 Yr. to $1.5 Mil
Rate APR
4.625 4.722 Details

 

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR
4.125 4.622 Details

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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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