Interest rates moved back down slightly last week .The following are excerpts from the newsletter on interest rates published by HSH Associates :
“We notched a small decline in mortgage rates this week, taking back a little of the increase of the past couple of weeks. Mortgage rates have been largely floundering around the bottom for several months, with not enough bad economic news or fear to drive them lower and just some cautious optimism to nudge them upward. A period of warmer economic data from the end of 2012 has moved them off bottoms, but there seems nothing in place to keep them moving upward.
A fair spate of economic news came out this week, including the Federal Reserve’s latest survey of regional economic conditions, commonly called the “Beige Book” for the color of its cover. The release said that “Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report, with all twelve Districts characterizing the pace of growth as either modest or moderate.” At least in the six-week period ending January 4, the economy is moving at a somewhat quickened pace. Of note is that nine districts reported that growth in residential real estate markets was “moderate” or “strong”. Housing is beginning to drive the economy more fully, and ongoing refinancing should help encourage consumer spending.
Mortgage rates have lifted off absolute bottoms over the past couple of weeks. With the economy holding at a fair pace, probably a GDP of 2.2% or thereabouts for the fourth quarter and now, and with the automatic spending cuts and debt ceiling issues not yet derailing the economy, there’s no reason for them to revisit those pre-holiday depths. However, better though the economy may be, it continues to be held there by extraordinary monetary policy, and there are plenty of dark clouds about which could filter or diminish the sunlight at virtually any time.
Still, there are plenty of reasons for optimism, more now than perhaps at any time over the past couple of years. Important drivers of the economy — housing markets, retail sales, automobile sales, for example — are all moving at an improved pace relative to where they had been. That interest rates have risen by a slight bit off absolute rock bottoms is in itself an expression of optimism, as investors are more confident about putting their capital at risk and at work in the broader economy, rather than stuffing it in a metaphoric mattress.
Rates dipped a little this week but seem likely to tick back upward a little next week, perhaps by the same amount.”
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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