Interest Rates Ease a Bit

Interest rates eased down about an eighth of a point this week, and remain near historical lows. With the volatility in the stock market expected to continue, the flight to safety and bonds is expected to continue, keeping interest rates down The following are some excerpts from this week’s newsletter on interest rates from HSH Associates :

“Optimism about a plan to shore up wobbly Greek debt markets continues to diminish, and investors are again favoring the safe haven of US Treasury debt. Few countries have signed up for the euro-bailout plan and there is no indication as of yet that a deal will actually get done soon.

Of course, troubles in the world often end up being good news for U.S. mortgage borrowers, and this was again the case this week.

While news about the economy continues to suggest we will avoid falling into a new recession, there’s not much to suggest that a strong breakout of growth is imminent, either, and the slow economic slog continues, if at perhaps a better pace. No one knows this better than the Federal Reserve, which noted in the release which signaled the close of their two-day meeting this week that “economic growth strengthened somewhat in the third quarter” but “recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated.”

The Fed also released its latest set of economic projections, and marked down the paths for GDP growth and unemployment while increasing their projections for inflation for 2012 and beyond. None of this was particularly good news, but did underscore the Fed’s recent decision to hold short-term interest rates at low levels at least though mid-2013 as it would appear the economy may need the additional support should the Fed’s expectations turn into reality.

Given fractious political bodies, both domestic and abroad, there’s little reason to expect that any sort of deal will be satisfying to any one. This rings as true for Greek and other euro-zone bailouts as well as President Obama’s half-trillion-dollar jobs bill or any Federal Reserve plans to stimulate the economy which may yet come. That we are in the midst (again) of an election cycle give one the uneasy feeling that nothing of any value will be accomplished for another whole year, and even then perhaps not for some while after any electoral change.

In its way, this concept foments or perpetuates the gloomy mood which is keeping things from improving. That’s not to say that a sunny outlook would suddenly fix the economy or poorly-capitalized governments; however, political and regulatory bodies need to lead or at least show the kind of leadership qualities that ordinary people can rally behind. People are angry, depressed and moody, not just here but around the world, and there doesn’t seem like there’s a lot of relief anytime soon. Ultimately right or wrong, moving in any direction with consistency, clarity and purpose would help. Seems unlikely, so more muddy mess ahead will be our path.

Mortgage rates love a Greek (or any other) tragedy. Opportunities to finance or refinance remain strong, and if you are so inclined, you might do well to get your loan in process before month’s end, when at least a minor crush of refinancing is to be expected due to the expansion of the HARP program.

The slight slip in rates this week will probably hold for next week, unless a spate of optimism for a Greek deal comes to market. Figure on a couple basis point move upward at most.”

The following are interest rate quotes from Al Hermann of American California Financial Services:

30 Yr Fixed FHA

Rate
APR

3.750
4.437
Details

Conforming 30 Yr Fixed up to $417000

Rate
APR

3.875
4.021
Details

Conforming Jumbo 30 Yr Fixed $417001 – $625500

Rate
APR

4.250
4.392
Details

Jumbo 30 Yr. to $1.5 Mil

Rate
APR

4.750
4.886
Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)

Rate
APR

3.300
3.347
Details

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

Conforming Loans to $417,000

5 Yr Fixed: 2.500% @ .625/pts 2.750% @ 0/pts
30 Yr Fixed: 4.000% @ .750/pts 4.250% @ 0/pts

Conforming High Balance to $625,500

5 Yr Fixed: 2.625% @ .875/pts 3.000% @ 0/pts*

30 Yr Fixed: 4.125% @ .625/pts 4.375% @ 0/pts

Non-Conforming Loans to $2,000,000

5 Yr Fixed: 3.000% @ .875/pts 3.375% @ 0/pts**

30 Yr Fixed: 4.500% @ .375/pts 4.625% @ 0/pts

FHA Fixed Loans to $625,500

30 Yr Fixed: 4.000% @ .750/pts 4.250% @ 0/pts

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.

About mmegowan

I am a realtor with Remax Estate Properties in Palos Verdes Estates. Visit my website at http://www.maureenmegowan.com
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