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Interest Rate Rise Slows

Interest rates for buying a home on the Palos Verdes Peninsula moved higher this week but the rate of increases is slowing. The following are excerpts from the newsletter on interest rates published by HSH Associates :

"The 2018 uptrend for mortgage rates continues again this week, but for now at least, the rise in rates appears to be petering out. Freddie Mac's report of a two basis point increase for the weeks was about half of our expectation, and we might have even achieved stability is not for the minutes of the last Federal Reserve FOMC meeting.

On Wednesday, the text of the discussion from the January 30-31 meeting revealed a greater level of optimism among Fed members that economic growth and inflation will both be on the increase in 2018. In light of a current strengthening of economic activity and the expected effects of tax cuts, "A number of participants indicated that they had marked up their forecasts for economic growth in the near term", and "A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate.

 

 

 

If the financial markets can get through next week without major spasms, it may be a sign that a level of comfort is growing about the prospects for growth, inflation and Fed policy. If nothing else, a lack of an outsized response to any given report that comes in hot might indicate that investment positions have been set (or reset) to reflect the current and expected path for the months ahead. If so, that might even allow interest rates to settle back a little in the coming weeks, but it's to early to say this with much conviction. After all, if the cure for an economy that is feared to be running too warm is higher short-term rates, and the Fed obliges, a sense of relief may come, and markets might relax.

The ten-year Treasury ended the week at its lowest yields of the week, and fairly below the Wednesday Fed-minutes high. Give where they were before that flare, we'll probably see rates edging just a bit higher to start the week; as the bulk of the new data will come after Freddie closes their weekly survey, we might just get away with another 2-4 basis point bump in rates when the next report comes next Thursdaymorning."

The following are interest rate quotes from John Alvin of American California Financial:

 

30 Yr Fixed FHA
Rate APR  
4.000 5.141 Details
 

 

Conforming 30 Yr Fixed up to $453,100
Rate APR  
4.500 4.624 Details
 

 

Conforming Jumbo 30 Yr Fixed $453,101 - $679,650
Rate APR  
4.625 4.738 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  
4.125 3.926 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 • February 24 2018 11:22PM

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