Interest rates for buying a home on the Palos Verdes Peninsula remained steady this week . The following are excerpts from the newsletter on interest rates published by HSH Associates :
"Thanks to an early-week settling of interest rates from a soft stock market, our expected small bump for mortgage rates failed to materialize this week for the most part. That's actually a good sign, given the onslaught of new data to process and a Federal Reserve meeting to digest, situations that have produced higher rates in the not-that-distant past.
The Federal Reserve met on Tuesday and Wednesday to discuss monetary policy. No action by the central bank was expected, and none came, but we did detect perhaps a bit more confidence being expressed by the Fed in the statement that closed the two-day affair. Although the text was mostly unchanged from the prior missive, those usually noted that "Inflation is expected to rise to 2 percent over the medium term"; the latest was more absolute, stating that "inflation will rise to 2 percent over the medium term."
Futures markets had already discounted the likelihood of a move by the Fed at its next meeting in mid-March to less than a 20 percent chance, but new data in the days after the meeting took this to below 10 percent by late Friday. Our view is that a lot can change in six weeks, and if the Fed is serious about making perhaps three moves in short-term rates this year it may not want to cram them all in to the last half of 2017. We'll see how all that plays out as we go.
Interest rates moved higher in the days after the election, roughly held there as the Fed made a change to policy and remained there deep into holiday season. Since then, they have since mostly lacked direction. In the mid-valley between the December Fed meeting and this one (early-mid January), mortgage rates found space to ease, only to re-firm as we approached this week's central bank get-together. If the pattern holds true, we may somewhat see lower mortgage rates in the weeks ahead.
It seems to us in some ways, as has happened before, that the markets have moved in anticipation of conditions to come, and now wait to see if these conditions come to pass. The current stance for interest rates (and equities, too) is one of anticipating stronger growth, higher inflation and a more active Fed, but when will these come? Perhaps as important a question is "What happens if they don't?" There may yet be plenty of items that derail expected growth, disrupt global financial economies in ways that affect us, recurrent deflationary forces and more. The hopes of "more and better" that have pushed rates higher may or may not come to pass, or come to pass at a pace that doesn't requite mortgage rates at current levels.
This will all become clearer in time, as will assessments of whether disrupting the existing regulatory climate is considerable better than leaving it alone. For now, mortgage rates seem to us to be back in a place where they are in no hurry to run strongly in one direction or the other, at least not by much and not for long. As such, we'll figure on a wobble of a few basis points in Freddie Mac's average 30-year FRM, probably downward (but nearly equally as likely to rise)."
The following are interest rate quotes from American California Financial:
|30 Yr Fixed FHA|
|Conforming 30 Yr Fixed up to $417000|
|Conforming Jumbo 30 Yr Fixed $417001 - $625500|
|Jumbo 30 Yr. to $1.5 Mil|
|Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)|