Interest rates reached new historical lows this week. 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 :
“With just a slight wobble downwards, mortgage rates set new record lows this week. A modestly growing domestic economy is producing little upward pressure for rates, while downward force from the Eurozone trouble is a considerable counterbalance. Slack seasonal demand for funds may be playing a bit of a role, too, as even a couple of week upturn in applications for mortgages remains below levels seen as recently as October.
Conforming 30-year fixed rates finished the week at 4.05% + 0.31 points on average, besting the previous low of October 10 by five basis points. While there are no directly comparable records of which we are aware, rates are at approximately 60-year lows. That said, there is little practical difference between the rates of the past seven weeks and this week’s new low.
Muted economic growth with perhaps a slightly warmer feel has been evident for the past couple of months now. There appears to be just enough strength as to be able to tread water or even move forward slightly despite the current. Each month that we don’t lose ground allows us to propel just a little bit father along, and we may be able to generate some momentum if the situation across the Atlantic can find some stability.
The Federal Reserve held its final Open Market Committee meeting of 2011; no policy changes were expected, and none came. The statement which accompanied the close of the affair noted that “the economy has been expanding moderately”, while inflation “has moderated since earlier in the year.” Noted headwinds to growth included “apparent slowing in global growth” and a housing sector which “remains depressed.”
At least part of the reason that interest rates have eased back as the end of the year has approached is that inflation pressures seem to be subsiding. Largely driven by commodity prices, a strong period of price gains earlier this year has begun to peter out, leveling inflation. Measures of Consumer Sentiment have moved higher of late, as have Consumer Confidence but have yet to over take highs for the year, which weren’t exactly lofty highs to begin with. The weekly Bloomberg Consumer Comfort Index has been virtually flat over the past four weeks
Next week, the holidays kick in with a vengeance, with their usual whirlwind of things to do and places to go. Just as there has been little reason for rates to move much over the past couple of weeks, there will be little reason for them to do so next week. Rates will again wobble, possibly downward if we don’t get a “Santa Claus” rally in the equity market. ”
The following are interest rate quotes from Al Hermann of American California Financial Services:
30 Yr Fixed FHA Rate 3.250 APR 3.922
Conforming 30 Yr Fixed up to $417000 Rate 3.750 APR 3.895
Conforming Jumbo 30 Yr Fixed $417001 – $625500 Rate 3.990 APR 4.130
Jumbo 30 Yr. to $1.5 Mil Rate 4.875 APR 5.012
Jumbo 7/1 ARM $1.5 Mil (higher loan amt available) Rate 3.375 APR 3.489
The following are interest rate quotes from Jan Schott Bank of America, Home Loans firstname.lastname@example.org 310-802-2300 :
Conforming Loans to $417,000
5 Yr Fixed: 2.500% @ 1.000/pts 2.875% @ 0/pts
30 Yr Fixed: 3.875% @ .875/pts 4.125% @ 0/pts
Conforming High Balance to $625,500
5 Yr Fixed: 2.625% @ 1.000/pts 3.000% @ 0/pts*
30 Yr Fixed: 3.875% @ 1.000/pts 4.375% @ 0/pts
Non-Conforming Loans to $2,000,000
5 Yr Fixed: 2.875% @ 1.000/pts 3.125% @ 0/pts
30 Yr Fixed: 4.250% @ 1.000/pts 4.625% @ 0/pts
FHA Fixed Loans to $625,500
30 Yr Fixed: 3.750% @ 1.000/pts 4.250% @ 0/pts
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