Maureen Megowan's Blog


Rates Inch Up a Bit Last week

Interest rates moved up a bit this week and remained near record lows. FHA and conforming loans moved up about an eigth of a point, cand conforming jumbos and regular jumbos moved up about a quarter of a point.The following are some excerpts from this week's newsletter on interest rates from HSH Associates :


"The Federal Reserve acknowledged this week what we've been championing for months: The economy is getting better. While their assessment suggests that the growth needles has moved by just a touch -- from "modest" to "moderate", it was enough to spark a strong move in interest rates, and underlying Treasury yields moved considerably higher by week's end. Mortgage rates of course will follow, but perhaps not to the same degree; rather the distance between benchmark Treasuries and mortgage rates ("spread") will probably compress somewhat.


A reasonable proxy for the movement of mortgage rates -- the yield on the 10-year Treasury -- has hung at or below the two percent level for much of this year with a few exceptions. Those yields flared higher, rising nearly a third of a percentage point between Wednesday and Friday.

If unwelcome, the increase in mortgage rates should be minor, and no one should be surprised. A better economic climate almost always brings higher rates, and a lessening of the troubles in Europe from massive central bank assistance adds to the movement of money from safe havens to more risky assets, driving rates upward. There may also have been some lift from the news that a sizable majority of large banks passed their "stress tests" this week, buttressing the belief that things are getting better. In the statement which accompanied the close of their meeting, the Fed reiterated its present commitment to keep rates low until at least late 2014. We may start to see that time frame moved up if the more solid performance of the economy persists, but probably not for at least two meetings, if not more.

After a busy week this week, there's a smaller bit of new economic data due out next week. That said, it's housing, housing, housing. A fresh report from the National Association of Homebuilders is due, as are Housing Starts and Building Permits and reports covering sales of both existing and new homes. We should get a solid sense of whether recent gains (at least through February) are setting the stage for a Spring homebuying season. We believe that perhaps the first one in a number of years is likely to come, but we have been generally more optimistic than some.

Higher mortgage rates will greet those reports. We saw a little bump for the week this week, but there should be some more yet to show as we roll through next week. Best to figure on perhaps an additional eight to ten basis point rise in the average by the time the week is out."

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)










The following are interest rate quotes from Jan Schott Bank of America, Home Loans 310-802-2300 :


Conforming Loans to $417,000


                    5 Yr Fixed:         2.500% @ 1.000/pts            2.875% @ 0/pts

                    30 Yr Fixed:      4.000% @ 1.000/pts            4.375% @ 0/pts


Conforming High Balance to $625,500


                   5 Yr Fixed:         2.625% @ 1.000/pts            3.250% @ 0/pts*

      30 Yr Fixed:      4.125% @ 1.000/pts            4.500% @ 0/pts


Non-Conforming Loans to $2,000,000



                   5 Yr Fixed:         2.750% @ 1.000/pts            3.125% @ 0/pts

                    30 Yr Fixed:      4.375% @ 1.000/pts            4.750% @ 0/pts


FHA Fixed Loans to $729,750


                   30 Yr Fixed:      4.000% @ 1.000/pts            4.250% @ 0/pts         


Rates based on a Single Family Residence Purchase with 20% down, FICO score of 740 or greater, 30/day pricing.  FHA is based on Single Family Residence Purchase with 3.5% down payment, FICO score  minimum of 620 and 30/day pricing.   Points are for Rate only.  Closing Costs apply.  Rates not guaranteed and subject  to change daily.  Please contact me for more information on Condo, Multifamily Units and Refinancing at 310-802-2300.  


* High Balance Conforming  5/1 ARM requires 25% down

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 . 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 2 commentsMaureen Megowan • March 16 2012 06:52PM


Seems different from state to state this week -- I wonder why that is. Hmm.


love and light and hope for good business,


Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) about 7 years ago

Maureen, it is important for buyers/borrowers to remember, these 30 year low interest rates should not be taken for granted. Excellent explanation of what could be an inching upward trend.

Posted by Emily Medvec Qualifying Broker, Realtor | Serving Santa Fe & Northern NM (Hello Realty) about 7 years ago

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