Interest Rates Go Down a Bit Again

Interest rates have gone down a bit over the last week. The following are some excerpts from this week’s newsletter on interest rates from HSH Associates :

“Along with a leveling of gains in equity prices over the past couple of weeks, at least some money has come back into bonds, taking the top off of a spike in mortgage rates which saw the conforming 30-year fixed-rate mortgage run from 4.32% on October 22, 2010 to as high as 5.09% on February 18 of this year. This week’s average of 4.74% for that most common instrument is almost exactly halfway between those two bookends.”

“Mortgage rates are a good reflector of both the current an potential economic climates. As prospects rose last year and it looked as though we’d be running a closer to full steam by now, both underlying and mortgage interest rates marched higher. As the reality dawned that we’re in for a slow slog of a recovery, and that a full or more robust recovery isn’t coming real soon, interest rates have stepped back down, and with the “unofficial” start of Summer starting to loom in the windshield — Memorial Day just a couple of weeks away at this point — we could be in for a slow Summer, and one which won’t even have the Fed’s QE2 program to distort it.

Not that we expected them to, but mortgage rates went down this week. Now that we’re a near-equilibrium — halfway between valley and peak — do they really have the legs to keep falling? Absent an additional sign of considerable economic slowing, probably not, and they may find a home at these levels for a little while.”

“The following are interest rate quotes from Al Hermann of American/California Financial Services ,

The following are interest rate quotes from Jan Schott Bank of America, Home Loans [email protected] 310-802-2300 :

“PURCHASE” SPECIALS

Friday, May 13, 2011

Conforming 15/Year Fixed to $417,000

3.750% @ .750/pts 4.000% @ 0/pts

Conforming 30/Year Fixed to $417,000

4.750%@ .500/pts 5.000% @ 0/pts

Conforming High Balance 30/Yr Fixed to $729,750

4.750% @ 1.000/pts 5.000% @ 0/pts

Jumbo 5-Year Fixed ARM to $2,000,000

3.625% @ .500/pts 3.875% @ 0/pt

Jumbo 30/Year Fixed to $2,000,000

5.000% @ .875/pts 5.250% @ 0/pts

FHA Fixed to $729,750

4.500% @ 1.000/pts 4.750% @ 0/pts