Interest rates for buying a home on the Palos Verdes Peninsula remained steady this week.The following are excerpts from the newsletter on interest rates published by HSH Associates :
“Mortgage rates have taken a bit of a wild ride of late, following spooked equity markets both down the roller coaster hill and back up the next, at least a little. Market panic behind us for at least the moment, mortgage rates have firmed from their lowest levels, leaving us at unchanged levels when compared to the last week.
Mortgage shoppers may be feeling a bit of whiplash, driven into markets by “rates plummet!” headlines, only to discover that, while it is true that rates are down, they’re only a little more than an eighth percentage point lower than levels seen for much of the summer. It’s also true that fixed mortgage rates are at June 2013 levels, but that was also the case in August, July and May — a case of mid-June then versus early June now. Conforming 30-year FRMs touched an average of 4.17 percent on each of those occasions, and are holding at 4.03 percent now.
Even as markets enjoyed relative stability this week, volatility remains lurking about, with only cautious optimism to temper restive markets. Given current global conditions, volatility for rates is probably biased more to the downside than up, but absent new gloom (or panic), rates probably also have some space to float higher.
Another announcement with no specifics is that Fannie and Freddie may ease back into loans requiring only 3 percent down. This too is merely a tweak, and probably says more about the renewed health of private mortgage insurers than anything else. Its a fair bet that 97 percent LTV loans are going to require other offsets (high FICOs/assets, etc) or will be aimed at limited audiences (borrowers with modest means, etc). We’ll need to see what comes when it comes.
Perhaps a more useful change was the multi-agency agreement to align Qualified Mortgage and Qualified Residential Mortgage standards. Those wishing to securities mortgages will still be required to hold back a 5 percent amount in a first-loss position, but the loans will no longer carry any specific down payment requirement, and loans meeting GSE criteria will be exempt from even that. The final ruling means that perhaps the moribund private label mortgage securities market will find new life, and life outside of jumbos. Time will tell.
After a period of tumult, things have settled for the moment. A troubled world continues to exert downward pressure on U.S. interest rates, even as our own fairly solid growth tries to push them up. At the moment, it remains may against one, giving us more downward pull than not. In times of panic investors will settle for little or no return on their money, provided they can park it in a safe place, but if better prospects for gains should show, such as a rising stock market, it’s a reasonable bet that money will drift out of bonds and chase those returns. That seems to be much of what happened this week, and by Friday the influential yield ion the 10-year Treasury closed the day at 2.27 percent, about where it was before all the trouble kicked in.
This week, we thought we’d take back some of last week’s dip in rates. It didn’t happen. Given the underlying pattern for rates, we’ll expect that this may happen in the coming week instead, when a 3-5 basis point rise in the FRMI is our expectation..”
The following are interest rate quotes from 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)|
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.