Interest rates have stabilized a bit over the last week

Interest rates have stabilized a bit over the last week or so. The following are some excerpts from this week’s newsletter on interest rates from HSH Associates :

” While the economy is moving forward at a measured clip, there are few signals that it is powering ahead so forcefully that interest rates should rise much further than they already have, and they may have even overshot the mark, which is typical.”

“Home sales have been a drag on the economy for several years now, and the latest numbers seem to continue the trend, if somewhat less so. Existing Home Sales moved 5.6% higher in November to a 4.68 million (annualized) pace. We continue to move away from the tax-credit-fueled distortions of last year and this year and may be starting to finally see the actual level of demand available in this marketplace. Due to those distortions, sales for the month came in about 28% below 2009 levels, when there was a rush to get deals done before a tax credit expiration (which was ultimately extended until April of this year).”

“With a soft economy and plenty of competition from low-priced foreclosure inventory, it’s to be expected that sales of more-expensive new homes continue to bounce along the bottom. Even a 5.5% rise in sales during November left actual sales at an annualized rate of 290,000 for the month, a figure which ranks among the worst numbers since records began in 1963. The minor rise in sales did draw inventory levels down a little to a still-elevated 8.2 months, and the number of units on the market built and ready for sale tracked below the 200,000 mark. With so few units available, and those probably the least desirable units at that, new homebuilding will need to start to happen before too long, and may provide a stronger contribution to the economy in 2011.”

“The leveling of interest rates for this week should largely turn into a two-week affair by the time next week rolls around, and we expect little change if any in mortgage rates.”

The following are interest rate quotes from Jan Schott Bank of America, Home Loans jan.schott@bankofamerica.com 310-802-2300 :

“PURCHASE” SPECIALS

Thursday, December 23, 2010

Conforming 30/Year Fixed to $417,000

4.750% @ .375pt                           5.000% @ 0/pts

Conforming 15/Year Fixed to $417,000

3.875% @ 1.000/pt                        4.125% @ 0/pts         

Conforming High Balance 30/Yr Fixed to $729,750

4.750% @ .875/pt                          5.000% @ 0/pts 

Jumbo 5-Year Fixed ARM to $2,000,000

4.125% @ .875/pt                         4.500% @ 0/pt    

Jumbo 30/Year Fixed to $2,000,000

5.375% @ .875/pt                          5.750% @ 0/pts

FHA Fixed to $729,750

4 .750% @ .250/pts                       5.000% @ 0/pts

Rates based on a Single Family Residence Purchase with 20% down, FICO score of 740 or greater, 30/day pricing.  FHA is based on Single Family Residence Purchase with 3.5% down payment, FICO score of 620, 30/day pricing.   Points are for Rate only.  Standard Closing Costs apply.  Rates not guaranteed and subject to change daily. 

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.