Maureen Megowan's Blog

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Interest Rates retreat a bit again

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

 

"Mortgage rates retreated a bit this week, still comforted by the outlook the Fed provided about the timing and trajectory for interest rates last week. Although average interest declined for the week, most of the warm glow from the Fed had faded by the end of the period, as the cold reality that the Fed will be raising rates before long began to again creep back into the market.

That's not to suggest there's any kind of strong likelihood that rates will be shooting up before long, but absent truly terrible data about the domestic or global economy, interest rates seem unable to hold any interim bottoms they manage, and after each leg down, up we go. While certainly not stellar and even with several soft points, there is sufficient good economic news available to help rates to firm. In many speeches and discussions, the Fed has called out the labor markets, housing markets and inflation as data points they are closely observing as they try to decide how and when to change policy.

 

 

 

For the last couple of months, and for a fair bit of time last year, too, we've been in a "push-me, pull-you" kind of interest rate environment, with rates firmed by more positive economic data domestically and largely dragged backward by poor data from overseas. With the ECB on the case and a warmer glow from across the globe, the downward drag has diminished somewhat of late; in turn, the continuing moderate pace of growth here provides no reason for short-term rates to remain at emergency levels, and the period of time in which they are likely to remain there grows shorter with each passing day. Although we're not yet there, the trend will eventually start to be more of a "push me" than "pull you", and rates will firm, probably in a notchy pattern of backing and filling even as they edge higher, perhaps on the order of two "push me" for every "pull you", or something similar to that.

When is this likely to occur? Well, this process could start as soon as next week, if the employment report is outsized and/or contains any signal of accelerating wages. The ISM and other data out could contribute to this too, or provide some exacerbation in on direction or the other. If the current pattern holds, though, the reports will be just enough to suggest that June might be on the table for the Fed to make its first policy change, or at least not enough to rule it out as a "liftoff" point. One way or another, we're in a more volatile rate environment, and here we're likely to stay for a while.

It's a toss up for mortgage rates for next week; we will start the week on an upward note, and whether that continues or not is "data dependent", to use one of the Fed's favorite phrases. On the basis of little more than a coin flip, we'll call for a five basis point lift in HSH's FRMI."

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

 

       

3.750

3.869

Details

       

 

Conforming Jumbo 30 Yr Fixed $417001 - $625500

Rate

APR

 

       

4.000

4.109

Details

       

 

Jumbo 30 Yr. to $1.5 Mil

Rate

APR

 

       

4.000

4.094

Details

       

 

 

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

Rate

APR

 

       

3.375

3.369

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 • March 28 2015 12:52PM

Comments

Maureen Megowan - Rates had been climbing so this was good news for home buyers that have been waiting to buy and lock in an interest rate!

Posted by Laura Allen, Lake Tahoe - Truckee Real Estate for Sale www.TahoeLauraLuxuryHomes.com, Tahoe Real Estate Agent Helping Buyers and Sellers (Coldwell Banker, Tahoe City, CA (530) 414-1260) over 3 years ago

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