Interest Rates Move Down

Interest rates for buying a home on the Palos Verdes Peninsulamoved down this week to interest rate lows last seen in May 2013.The following are excerpts from the newsletter on interest rates published by HSH Associates :

“Financial markets provided a fresh example this week that periods of quiet can quickly come to a close. A spate of fresh worries about the effects of low and falling oil prices and concerns that the Euro may face an existential crisis prompted a full-on flight to quality and safety buy of U.S. Treasuries, driving yields down sharply and pushing fixed mortgage rates to somewhat deeper lows, even as they continue to run into the May 2013 “wall”.

We have noted at times over the last few weeks that we were approaching a time known for a change in direction or velocity for mortgage rates; it appears to have arrived a bit more suddenly than anticipated. We’ve also been of the opinion that the battle between a weak world economy versus an increasingly stout U.S. economy would be more likely to firm rates than not, but we seem to have underestimated global pessimism.

No matter. As has been the case for the past few years, global troubles have been a good friend to American homeowners and homebuyers, and this continues to be the case.

Mortgage rates haven’t been much of a barrier to homeownership throughout the recovery, and of course still aren’t. Lower rates provide a little bit more incentive to some, and lower down payments or insurance costs will produce a bit more for others. Still, the issues in housing go beyond financing, and include everything from a lack of access to credit at all, lack of equity, lack of mobility, weak incomes, to fears about the present and a lack of confidence about the future, and plenty of other issues. The market is improving and continues to improve, but we have yet a ways to go.

It’s hard to expect mortgage rates to have much upward traction after a surprise week such as this one. Any disappointment, here or abroad, will tend to press rates down, and there quite a bit of new data on housing, prices and more next week. At best, we’ll probably hold these levels, but influences outside of domestic data are driving the market to the greatest extent of late, and have proven unpredictable.

The following are interest rate quotes from American California Financial: