Interest rates for buying a home on the Palos Verdes Peninsula moved up this week to levels not seen since May of this year.The following are excerpts from the newsletter on interest rates published by HSH Associates :
“Anyone who follows the economic tides should have been expecting this week’s small upward pop in mortgage rates. After all, we’ve had pretty solid figures regarding growth for several months now, all with nearly no effect on interest rates. We generally had more of the same this week, but also got some clarity from the Federal Reserve regarding how (if not when) it will “normalize” interest rate policy in the years to come.
In the meanwhile, we’ll need to contend with the end of Quantitative Easing (QE) and the uncertainty of a “considerable time” before the Fed begins to make policy changes. Uncertainty in markets usually translates to volatility, and after a several month stretch of tranquillity, we will likely need to become more accustomed to moves in rates such as the one this week.
The two-week bump in mortgage rates has totaled about one eighth of one percentage point , good enough to put to put a near perfect bookend on the summer valley for rates by returning us to May’s levels. Despite the rise in rates, they remain well below where they began the year.
A busy week of data and Fed, and the second meaningful uptick in mortgage rates in as many weeks. We’d need to see seven more increases just like this week’s to get us back to the highest levels of the year, and while it’s likely that rates will firm somewhat as we close the third quarter and begin the fourth, there’s nothing presently in the cards that suggests any kind of regular or straight-up increases in interest rates. If anything, slowing growth in other parts of the world and attempts by central banks to address that will continue to make U.S.-based investments a fair bet, providing some counter to any interest rate increases produced by our solid economy.
Most likely, mortgage and other interest rates have simply moved up off bottoms, and may plateau around these levels for a while, rather than hugging the floor as they did for four months. From where we sit, the bulk of the rise, small though it was, is over for now, but we might have a residual couple of basis point rise at most yet to go. Next week, we’ll get a look at new and existing home sales, a final update on second quarter GDP, a report from the Chicago Fed, durable goods orders and some other clues about the economy’s performance. Figure on little change to rates, adding maybe two basis points to this week’s FRMI, if anything.”
The following are interest rate quotes from American California Financial:
30 Yr Fixed FHA |
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Rate |
APR |
|
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3.625 |
5.273 |
Conforming 30 Yr Fixed up to $417000 |
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Rate |
APR |
|
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4.250 |
4.372 |
Conforming Jumbo 30 Yr Fixed $417001 – $625500 |
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Rate |
APR |
|
||||
4.375 |
4.486 |
Jumbo 30 Yr. to $1.5 Mil |
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Rate |
APR |
|
||||
4.250 |
4.345 |
Jumbo 7/1 ARM $1.5 Mil (higher loan amt available) |
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Rate |
APR |
|
||||
3.375 |
3.154 |
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.