Mortgage rates decrease significantly

Mortgage interest rates for buying a home on the Palos Verdes Peninsula decreased significantly this week ending 8/9/19. The following are excerpts from the newsletter on interest rates published by HSH Associates :

” Increasing concerns about the fragility of global economic growth continue to press interest rates down across the globe, with mortgage rates among them. The mortgage-rate retreat this week left the average offered rate for a conforming 30-year Fixed Rate Mortgage a little more than a stone’s throw the then 60-plus year low for the benchmark U.S. mortgage seen back in November 2012.

Falling mortgage rates since March have produced a cumulative decline of nearly 80 basis points, spurring a new surge in refinancing that will be intensified with this week’s additional dip. Home sales may get a little boost from lower rates, as this helps to offset still-rising home prices, but the difference in affordability from where rates have been for much of the summer isn’t enough to change the equation, and does nothing to address the problem of thin stockpiles of homes available to buy in the markets that need them most.

Applications for new mortgages have responded to the downdraft in rates, according to the Mortgage Bankers Association of America. In the week ending August 2, overall applications rose by 5.3%, driven entirely by refinancing, which climbed a stout 11.8% for the week. Applications for purchase-money mortgages continues to be lackluster, with a 2% decline for the period a fourth consecutive fall. Where refinancing is a more pure “interest-rate play”, a mortgage is just one component of buying a home and there are a lot of planets that need to align — not the least of which is finding a home you love enough to buy at a price you are willing (and can afford) to pay.

The old news is that mortgage rates were falling; that message had been played many times since the advent of spring when rates first began their 2019 decline. The new news is that they have fallen further, but for the moment seem to have found at perch, if an unsteady one. The domestic economic news continues to suggest that rates should be well above current levels, but the bigger picture is much darker than what we see from here. Until there is some reliable and repeated evidence that other economies are seeing improvement, it will remain easier for mortgage rates to fall than to increase, and even then, there’s no way to know what sort of mayhem the next tweet or retaliation-in-kind might bring, or from where. If anything, mortgage rates would like to hold steady next week, and if there is any form of political or global economic quiet, we just might see that, given a light early-week calendar of new data. It’s just a hunch, but we think that rates will managed to be largely unchanged by the time Freddie Mac reports next Thursday..”

The following are interest rate quotes from John :Alvin of American California Financial Services, Inc. :

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 https://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.