Interest rates for buying a home on the Palos Verdes Peninsula remained level this week . The following are excerpts from the newsletter on interest rates published by HSH Associates :
“In the aftermath of a very noisy week for financial markets came a rather quieter period, at least in terms of fresh data and changes atop the Federal Reserve are concerned. At the moment, its potential changes to the U.S. tax code that are garnering the most attention. As seems to regularly be the case in politics these days, there’s not much by way of consensus, and so the coming days and weeks are sure to see some battles in Congress. There is a hoped-for goal to get a deal in place by the end of the year, but with many differences to reconcile that may not come to pass.
The prospects of economy-boosting stimulus being delayed being somewhat lessened by the competing proposal from the House and Senate helped interest rates to settle back a little bit in recent days. Without markets being able to develop a sense not only of what is coming but when it may come, it’s reasonable to think that we’re in for a bit longer period of moderate growth rather than a imminent speed up, so interest rates had a little space to settle as a result.
Depending on what comes, we may see effects on mortgage rates, home prices, the mortgage interest deduction and more, but there’s little to say about any of these until the dust settles.
While we still are likely to see somewhat higher mortgage rates at some point, the trend remains mostly a muted one. The Fed’s gradual reduction of its bond holdings is underway with little fanfare or effect on rate (so far), but another lift in short-term rates is likely just a few weeks away and we will probably see a little firmness as we turn the corner into December. However, absent any significant inflation concern, it will remain hard for rates to get much upward traction, dragged down as they are by a world that is still employing QE-style policies. In this situation, comparatively high U.S. bond yields remain an attractive opportunity for foreign investors faced with rock-bottom local yields, and every time rates here edge higher, it’s to be expected that fresh money comes after them, which in turn pushes them back down to a degree. Ultimately, when more bonds become available as the Fed steps away from the market more quickly higher yields may become more sticky, but for the moment, this is simply not the case.
A fairly quiet week last week for interest rates, but things will pick up a bit data-wise this week. Mortgage rates really have little upward traction and any that does seem to form (as we saw in September and into October) just doesn’t seem to have staying power. Backing and filling seems to be the order of the day, but our expectation is that we’ll generally notch our way higher as we go. In reviewing the trend for last week there’s not much to see, so odds favor perhaps an increase of a couple of basis points in the average conforming 30-year fixed rate reported by Freddie come this Thursday”
The following are interest rate quotes from John Alvin of American California Financial:
30 Yr Fixed FHA
3.375 4.506 Details
Conforming 30 Yr Fixed up to $424,100
3.875 3.994 Details
Conforming Jumbo 30 Yr Fixed $424,101 – $636,150
4.125 4.235 Details
Jumbo 30 Yr. to $1.5 Mil
Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
3.750 3.747 Details
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.