Interest rates moved up a fraction over the last week, and mortgage rates for Jumbo loans are still particularly attractive, down to the low 5% level.The following are some excerpts from this week's newsletter on interest rates from HSH Associates :
"The increasingly weak economic outlook has driven mortgage rates to 2011 lows. While we remain about a third of a percentage point above our October 2010 rock-bottom levels, we should be nearing a place where refinancing opportunities start to show for an increasing number of homeowners. "
"Given the wide differential in interest rates, at least some borrowers should be considering hybrid 5/1 ARMs; whose five-year fixed periods now average just 3.36%, down six hundredths of a percentage point from last week. Certainly, there are savings to be had for borrowers willing to accept some future interest-rate risk...The accumulation of weak economic news of the second quarter still has yet to fully play out, but it is pretty clear even to a casual observer that more is yet due. However, the story is in some says starting to become familiar, and the disappointment which drives rates lower all too commonplace. To us, this suggests that, absent a true surprise on the downside, that the run down in interest rates may be coming to an end, with any better news getting more credence."
The downward pressure on interest rates is primarily due to the poor economic reports which were recently released which caused a large downward move in the stock market. This led many investors to a flight to safety with increased demand for Tresury securities. This increase in demand led to increased prices of T bills and thus lower yields and a general decrease in interest rates including those of 10 year Treasury securities which serve as a guideline for mortgage rates.
The following are interest rate quotes from Al Hermann of American/California Financial Services ,
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30 Yr Fixed FHA |
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Rate |
APR |
|
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|
4.250 |
4.707 |
|
Conforming 30 Yr Fixed up to $417000 |
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Rate |
APR |
|
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|
4.490 |
4.642 |
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Conforming Jumbo 30 Yr Fixed $417001 - $729750 |
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Rate |
APR |
|
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|
4.625 |
4.770 |
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Jumbo 30 Yr. to $1.5 Mil |
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Rate |
APR |
|
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|
5.000 |
5.138 |
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Jumbo 7/1 ARM $1.5 Mil (higher loan amt available) |
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Rate |
APR |
|
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|
4.125 |
3.380 |
The following are interest rate quotes from Jan Schott Bank of America, Home Loans jan.schott@bankofamerica.com 310-802-2300 :
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