Interest rates for buying a home on the Palos Verdes Peninsula bounced higher this week.The following are excerpts from the newsletter on interest rates published by HSH Associates :
“As expected, mortgage rates bounced higher this week by about a tenth of a point, driven upwards by more promising economic news. Most of that news came at the end of last week; this week featured more of a mixed bag of mostly second-tier data to describe the state of the economy.
Federal Reserve Vice Chair Janet Yellen sat before members of the Senate Banking Committee as a part of the process of possibly becoming the next Chair of the Federal Reserve. Ms. Yellen defended current Fed policies of easy money even as she acknowledged concerns about potential inflation risks and the efficacy of the program; as well, she also fielded question with regards the Fed’s regulatory and supervisory powers. With regards to tapering the Fed’s present QE program, no timetable was provided, but she did reiterate that the FOMC considers changes to the program to be fully dependent upon incoming economic data.
Given that fiscal policy has been virtually nonexistent in promoting the recovery, the Fed’s policies of low short-term interest rates and long-term bond buys are really the only stimulus game in town. These of course have limits; refinancing of debt can only go so far, and employment gains depend more on final demand than the cost of capital, but at least the Fed should be credited for trying to move the growth needle over the past several years.
If the Fed is successful in strengthening the economy further, mortgage rates will firm, joined by useful fiscal policy or not.
With warmer data pushing one way and the Fed’s stance pulling another (and that reinforced to a degree by Ms. Yellen’s discussions before Congress this week) rates have become a little rangebound. Sure, there is some volatility to be seen, and that will continue, but we are in no danger of topping recent highs (or reaching recent lows) at the moment.
While the overall tenor of the data is warmer, and is expected to be next week as well, Ms. Yellen’s comments about Fed policy and the comfortable readings on prices did provide some comfort to the market, trimming back some of the increase seen in the early part of the week. Next week comes new data about homebuilder sentiment and existing home sales, Consumer and Producer price indexes, retail sales and a couple of reviews of regional economic activity, as well as the minutes from the October Fed meeting. It should be an interesting week, and mortgage rates should hold pretty firm around present levels.”
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)|