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Interest rates stay level

Interest rates for buying a home on the Palos Verdes Peninsula stayed level this week. The following are excerpts from the newsletter on interest rates published by HSH Associates :

 

"With the noise of crashing financial markets diminished of late, it's a little easier for the softer sounds of the broader economy to be heard. As we've noted in recent weeks, the economy only needs to show that it maintaining reasonable stability despite the difficult climate to give the Fed reason to consider continuing its campaign of carefully lifting interest rates this year, and for interest rates to firm up.

There's still almost a zero possibility that the Fed will move in March, and at the moment (and pending more inbound data) probably only a limited chance they would move in April, but if the data keeps showing reliable expansion, June becomes a very real target.

Markets reflected this change in a very discernable way, lifting Treasury yields markedly on Tuesday and again on Friday, as key economic signals are moving in a positive or more positive direction. Mortgage rates haven't yet reacted much, but will.

 

 

 

There's no getting around it: If the economic news is better (and of late, it's fair enough) mortgage rates will rise. With several of the Fed's key metrics holding their own or more it certainly again raises the probability of the Fed moving back into position for lifting interest rates. It bears remembering that the economy was slowing as last year came to an end, with the incoming data only fair at best, and the Fed raised short-term rates for the first time in nearly 10 years. We don't and won't need to be in a situation where things are running at a clip that could even remotely be considered "hot" -- all it will take for the Fed to re-start their plan is stable markets and reliable, steady growth, even if at a measured pace.

New economic projections ("dot plots" and such) will come with the Fed's March meeting, now just a week and a half away. If there hasn't been much change from the December outlook, this would likely set the stage for a snap-back in mortgage rates to late December/early January levels in short order even with no change to policy.

We don't have to worry about that for next week, though, but rates will be on the rise, taking back some more of 2016's unexpected decline. It's a good idea to expect perhaps a five basis point rise in HSH's FRMI for the week."

 

 The following are interest rate quotes from American California Financial:

30 Yr Fixed FHA
Rate APR  
3.250 4.379 Details
 

 

Conforming 30 Yr Fixed up to $417000
Rate APR  
3.625 3.743

 

Conforming Jumbo 30 Yr Fixed $417001 - $625500
Rate APR  
3.875 3.983

 

Jumbo 30 Yr. to $1.5 Mil
Rate APR  
4.000 4.094

 

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate APR  
3.375 3.473

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.

Comment balloon 1 commentMaureen Megowan • March 05 2016 10:47AM
Interest rates stay level
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Interest rates for buying a home on the Palos Verdes Peninsula stayed level this week. The following are excerpts from the newsletter on interest rates published by HSH Associates : "With the noise of crashing financial markets diminished of… more
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