Interest Rates Increase Slightly

Interest rates for buying a home on the Palos Verdes Peninsula increased slightly this week. It is interesting to note that jumbo mortgages ( in excess of $625,500 ) have interest rates available below conforming loans. The following are excerpts from the newsletter on interest rates published by HSH Associates :

“The din of economic news continues to point to stronger growth as the spring has progressed, but mortgage and other interest rates have mostly ignored that message so far, as they have been mostly easing rather than firming. Although the latest batch shouldn’t change that trend by much, but does seems to have been sufficient to stop the recent slide, at least for the moment.

For the most part, interest rates have defied gravity this spring, or at least seem to be bending some economic laws, as they have managed to slide to year-ago levels despite an economy which is obviously moving at a quicker pace than the backwards one from the first quarter of this year. If the economy is growing and continues to, and if the Federal Reserve continues its regular trimming of QE, it only stands to reason that mortgage rates would be more likely to firm than not. However, any number of events have worked to the benefit of mortgage shoppers so far this year, but it would be wrong to think that this will last forever.

“The economy continues along at a modest pace, but certainly one running at a faster than the first quarter retreat we endured just a few short months ago. It remains an open question whether mortgage and other interest rates can continue to hold at these low levels as we continue to chug along. In a troubled world, investing here remains the safest play, and we continue to see this in both record-high reading for stock indexes and downward pressure on rates. If growth starts to become more of a global expression than a domestic one, we will start to see rates move higher as money moves to other parts of the globe in search of greater returns. For now, though, the influx of cash remains a favorable happenstance for American mortgage borrowers and should continue to help provide at least some support for a housing industry that can still use all the help it can get in many ways.

Firmer economic readings should mean a little firmer interest rates in the next week. There’s little likelihood of a strong move, but a upward wobble of a few basis points seems the most likely course to us.”

The following are interest rate quotes from American California Financial: