Maureen Megowan's Blog

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Interest Rates Edge Up

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

 

"Well, it was a nice run while it lasted, but of late the selloff in stocks and the corresponding decline in yields and mortgage rates has switched places, with equities again appealing to investors at the expense of bonds. Although the latest economic data wasn't great, soothing words from Chair Janet Yellen this week about the expected path of the economy and Federal Reserve's intentions for policy seemed to spread a bit of cheer. While this was much to the liking of stock markets, the mix of mostly softer news kept interest rates from rising by much.

The dip in mortgage rates to open 2014 was unexpected, but welcome. If Federal Reserve expectations come to pass, and unless the economy tanks to a real degree or there are global issues which show themselves, we may have just seen the lowest mortgage rates of 2014.

 

 

 

That's not to suggest that there is a strong likelihood of skyrocketing mortgage rates; rather, if the economy performs as expected, mortgage rates will tend to be firmer than not. Even so, from today's levels, we have a fairly long way to go just to reach the 5 percent mark, let alone approach anything which could be considered expensive even in recent historical context. The last time we had a 5 percent handle for conforming 30-year FRMs was two years ago; there of course were plenty to be seen in 2010 and 2009. Six percent? That would be the week ending November 21, 2008 -- just a few days before the Fed first announced that it would begin to buy MBS to support a flagging mortgage market. The last time for seven percent? Well, we're now approaching twelve years since the last time that happened.

At the moment, there's barely even enough heat in the economy to nudge us toward five, let alone any of those other "lofty" levels. Although mortgage rates have stopped falling and reversed course, they're not going far, as there's just too much weakness around for them to move quickly higher.

All in all, the rate pendulum seems to be on a bit of an upswing, and we think we'll add a few more basis points to this week's average in a President's Day shortened week."

The following are interest rate quotes from American California Financial:

 

30 Yr Fixed FHA

Rate

APR

 

       

3.750

5.054

Details

       

 

Conforming 30 Yr Fixed up to $417000

Rate

APR

 

       

4.375

4.497

Details

       

 

Conforming Jumbo 30 Yr Fixed $417001 - $625500

Rate

APR

 

       

4.500

4.611

Details

       

 

Jumbo 30 Yr. to $1.5 Mil

Rate

APR

 

       

4.500

4.596

Details

       

 

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

Rate

APR

 

       

3.500

3.246

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 1 commentMaureen Megowan • February 15 2014 11:57AM

Comments

Maureen

We still have some of the lowest rates in decades.  It's all in the buyer's and public perspective.

I've been around a long time, and remember when rates were 17%, but try getting anyone who was not a perspective home buyer then to appreciate that fact in today's market.

It's our job to spread the knowledge, and maintain a " Glass Half Full " perspective.

Have a great weekend.

Posted by Wayne L. Brown (Franklin Advantage Inc.) over 4 years ago

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