Interest rates ended the week basically unchanged and at record lows. Following are some excerpts from this week’s newsletter on interest rates from HSH Associates :
“Although the economy isn’t back to “square one”, mortgage rates are. Of course, that’s to the benefit of homeowners looking to refinance and potential homebuyers shopping for homes. Whether they are able to or will respond to these recurring interest-rate opportunities remains to be seen, and will largely depend upon the economy continuing to recover. Unfortunately, it looks as though we have entered a economic soft patch, and that the kind of upward momentum needed to move us to “expansion” from “recovery” isn’t happening.
Accumulating signs of slower growth started to appear some weeks ago. There’s nothing to suggest any kind of hard stop for the economy, but the news has turned from solid in the early two months of the year to more mixed in the most recent two. The Fed has noted that growth in the fourth quarter of 2011 was “moderate” at best, but it seems to us that further moderation has happened in the first quarter of 2012. The initial report for 1Q12 Gross Domestic Product comes out next week, and it is a reasonable bet that the report will show a deceleration in activity to perhaps a 2.2% rate for the quarter.
For wanna-be mortgage borrowers, disappointing economic news is music to their ears. Troubles in overseas markets have resurfaced and the economy here seems to be sputtering to a greater degree. A strong surge in stocks during the first quarter turned into a selling event to lock in profits, and at least some of that money which optimistically sought higher returns in riskier investments has again returned to the safety of bonds and Treasuries, pulling interest rates back down.
Will the tide of disappointing yet still moderate economic news continue next week? It seems to us that it will. Since the builders have already weighed in, a softer report on new home sales seems a given. We have already mentioned that we think GDP will come in with a downturn relative to the fourth quarter of 2011. There are a couple of other indicators including Consumer Confidence and Sentiment gauges which may nudge downward. If the Fed leaves any impression that it is more likely to move to support the economy (unlikely), we could see interest rates move upward. At the moment, though, and based upon this week’s market activity, we don’t seen much movement happening in mortgage rates for next week.”
The following are interest rate quotes from Al Hermann of American California Financial
30 Yr Fixed FHA
Conforming 30 Yr Fixed up to $417000
Conforming Jumbo 30 Yr Fixed $417001 – $625500
Jumbo 30 Yr. to $1.5 Mil
Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
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