Interest Rates Don’t Move Much

Interest rates remained about the same this week and remained near record lows. The following are some excerpts from this week’s newsletter on interest rates from HSH Associates :

“The economy climate continues to show signs of growth. Mortgage rates continue to hold near record lows. This is a bit of an unusual happenstance, but one which might prove to be the linchpin for the formation of a “spring housing market” for 2012.

In “normal” times, one would expect to see solid economic news accompanied by a little sell-off in low-risk assets and a corresponding rise in yields and mortgage rates. Although underlying interest rates are a little firmer than just a few weeks ago, mortgage rates aren’t following them to any real degree.

An upsurge in home sales will of course require a continuation of low rates, but also will need to be joined by off-market inventory coming on line. According to the National Association of Realtors, inventory levels for existing homes last month were at a near-normal 6.1 months of supply, and inventories of new homes were even thinner than that. With the servicing-abuse settlement behind us, the expectation is that a fair bit of foreclosed properties will make it to market, and also that some discouraged sellers might come back, too.

Are we finally getting the supports in place to make the housing markets actually work? Will a combination of HARP 2.0 for underwater borrowers, low-cost streamlined refinances for others, an unclogged foreclosure system, more jobs and improving confidence do the trick? They should, at least enough to nudge the needle forward a new notches. Still, we’ve a long way to go and some uncertain waters to yet navigate.

The Federal Reserve meets next week to ponder these and other thing economic. They should be encouraged by what they see happening around them, and that will no doubt be reflected in the statement which closes the meeting on Tuesday. If things keep moving in the direction they have been, they will probably come to regret before long their forecast to keep rates at rock-bottom levels until late 2014.

Aside from the Fed meeting, there’s a fair bit of data due out, including some information on inflation. Fed Chairman Bernanke is of the mind that price increase for gasoline aren’t much to worry about, but if we hope to move from recovery to expansion, they should be considered a threat. Mortgage rates wander around again next week, possibly adding a couple of basis points to this week’s average.”

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

30 Yr Fixed FHA

Rate 3.700
APR  4.384
Conforming 30 Yr Fixed up to $417000

Rate  3.875
APR  4.021

Conforming Jumbo 30 Yr Fixed $417001 – $625500

Rate  4.000
APR  4.140

Jumbo 30 Yr. to $1.5 Mil

Rate  4.500
APR  4.635

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

Rate  3.625
APR  3.698
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: 2.375% @ 1.000/pts 2.875% @ 0/pts
30 Yr Fixed: 3.875% @ 1.000/pts 4.375% @ 0/pts

Conforming High Balance to $625,500

5 Yr Fixed: 2.500% @ 1.000/pts 3.250% @ 0/pts*

30 Yr Fixed: 4.000% @ 1.000/pts 4.625% @ 0/pts

Non-Conforming Loans to $2,000,000

5 Yr Fixed: 2.625% @ 1.000/pts 3.000% @ 0/pts

30 Yr Fixed: 4.125% @ 1.000/pts 4.500% @ 0/pts

FHA Fixed Loans to $729,750

30 Yr Fixed: 3.875% @ 1.000/pts 4.250% @ 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 minimum of 620 and 30/day pricing. Points are for Rate only. Closing Costs apply. Rates not guaranteed and subject to change daily. Please contact me for more information on Condo, Multifamily Units and Refinancing at 310-802-2300.

* High Balance Conforming 5/1 ARM requires 25% down

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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