Interest Rates Remain Near Historical Lows

Interest rates remain near historical lows. The following are some excerpts from this week’s newsletter on interest rates from HSH Associates :

“Both global and domestic economic troubles contribute to the low interest rate environment, as central banks keep short-term rates low while investors seek shelter for their assets, content to earn little if anything on their holding rather than expose those funds to potential loss. This in turn keeps mortgage rates on a low and even path, and for that, at least potential homebuyers and refinancers can be thankful.

Somewhat more people than expected purchased an existing home in October. The 4.97 million (annualized) rate of sale was rather stronger than the 4.9 million that was expected, and the last three months of sales have been marginally stronger than the previous three. The improvement in sales meant a reduction in the number of months of inventory on the market; the 8.0 months of stock remaining was the smallest number this year, but is arguably more due to fewer homes being posted for sale amid difficult conditions than any surge in demand. It is also expected that inventory levels will begin to rise in 2012 as a backlog of foreclosures begins to work its way to market. That will continue to pressure home prices which already are on a declining path in most areas.

By Monday, we’ll get a sense of how the retailer’s Black Friday and weekend went, and there is a fair bit of end-of-the-month and first-of-the-month data out next week, including new home sales, the Fed’s regional survey of economic conditions, ISM report, auto sales and of course, the employment report on Friday. Given the gentle upward momentum of late, we think there might be upside surprises to some of these; normally, this would be sufficient to move mortgage rates up a few basis points by the end of the week. However, the Eurozone mess is proving to be more than sufficient counterweight to any modest improvements here, and we will probably hold steady or may even shed a couple of basis points on average.”

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 :

Conforming Loans to $417,000

5 Yr Fixed: 2.500% @ .750/pts 2.750% @ 0/pts

30 Yr Fixed: 4.000% @ .500/pts 4.250% @ 0/pts

Conforming High Balance to $625,500

5 Yr Fixed: 2.625% @ .875/pts 3.000% @ 0/pts*

30 Yr Fixed: 4.000% @ .750/pts 4.375% @ 0/pts

Non-Conforming Loans to $2,000,000

5 Yr Fixed: 3.125% @ .500/pts 3.250% @ 0/pts

30 Yr Fixed: 4.375% @ .875/pts 4.625% @ 0/pts

FHA Fixed Loans to $625,500

30 Yr Fixed: 4.125% @ .875/pts 4.250% @ 0/pts

Rates based on a Single Family Residence Purchase with 20% down, FICO score of 740 or greater, 30/day pricing. FHA is based on Single Family Residence Purchase with 3.5% down payment, FICO score minimum of 620 and 30/day pricing. Points are for Rate only. Closing Costs apply. Rates not guaranteed and subject to change daily. Please contact me for more information on Condo, Multifamily Units and Refinancing at 310-802-2300.