Maureen Megowan's Blog

head_left_image

Interest rates end the week at record lows

Interest rates ended the week at record lows. Following are some excerpts from this week's newsletter on interest rates from HSH Associates :

"By a whisker, mortgage interest rates eased to new record low levels this week, as neither the economy nor the Federal Reserve gave any indication that there is a reason for them to rise at the moment. The economic climate has turned considerably more mixed over the last two months, with rather more signs of deceleration than acceleration. It may be only a pause, but it is possible that modest growth may be all we can expect for a while to come yet. To be fair, the new record for rates is just a single basis point lower than the old, and there was little move at all this week.

 

The Federal Reserve Open Market Committee met this week to discuss the economy and decide whether any present policies should be changed. No changes were expected, and none came; the only new light shed as a result of the meeting is that at least two more Fed Governors moved up their forecasts of when the first changes to the Federal Funds rate will occur. Formerly, there were two outliers who believed that 2016 might bring the first such move, but they seem to have now shifted into the 2015 camp, and others slid from the 2015 to the 2014 group. Since the Fed has stated on more than one occasion that it expects to keep rates low well into 2014, this came as only a mild surprise at best.

The Fed's Operation Twist comes to a close in just about nine weeks' time, but there was nothing in the statement which closed the meeting (nor in Fed Chairman Bernanke's subsequent press conference) to indicate that the program would be replaced, allowed to expire or extended, but only that the Fed stands ready to change policy if needed and as suggested by incoming data. As the warm start to 2012 has faded somewhat, that suggestion has moved from "less is needed" earlier this year to now somewhat more is warranted.

We know that sales of homes have been better this year than last. That said, they are still rather weak, and of late, have begun to soften up a little bit. This change may or may not be due to the unusually warm winter moving some purchases up to January and February, but there was some slowing seen in March. 

 

Mortgage rates should be fairly flat again next week."

The following are interest rate quotes from Al Hermann of American California Financial 

 

30 Yr Fixed FHA

Rate

APR

 

       

3.500

4.232

Details

       

 

Conforming 30 Yr Fixed up to $417000

Rate

APR

 

       

3.750

3.895

Details

       

 

Conforming Jumbo 30 Yr Fixed $417001 - $625500

Rate

APR

 

       

3.875

4.014

Details

       

 

Jumbo 30 Yr. to $1.5 Mil

Rate

APR

 

       

4.500

4.635

Details

       

 

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)

Rate

APR

 

       

3.625

3.500

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.

Comment balloon 0 commentsMaureen Megowan • April 29 2012 01:04PM

Comments

This blog does not allow anonymous comments