Interest Rates Still Great !!!

Interest rates remained near record lows. The following are some excerpts from this week's newsletter on interest rates from HSH Associates :

"The Federal Reserve kicked off its new strategy of clearer communications at the close of January's Open Market Committee Meeting on Wednesday afternoon. With just a few words, plus some charts, the Fed now expects to keep interest rates "extraordinarily low" for a period up to 18 months longer than the mid-2013 previously in place. Also for the first time, the Fed more officially revealed more explicitly that it will use an inflation target to help control monetary policy.

Mortgage rates were rising somewhat in the early part of the week, goosed by warmer economic news, but reversed course to some degree. Why? If nothing else, it reinforces the idea that the Fed expects the economy to continue to experience sub-par growth which will require additional assistance, and that price pressures are low and will likely remain that way for some time.

The Fed's commitment to a low interest rate policy (and possibly a QE3) is aimed squarely at reviving the housing market. Sales of new homes came in at an annualized rate of 307,000 in December, down by some 7,000 units from November. While it was the worst year for new home sales since records were kept (1963), we have been encouraged by both the stable pattern of sales and also that inventory levels are at record lows (157,000 units built and ready for sale, about 6.1 months worth at the present rate of absorption). With lows of 281K annualized units and highs of 316K annualized, we are closer to the top than the bottom of a weak range, so any increase in demand must be met with new construction.

Arguably, the broad economy is better served by re-igniting and re-inflating housing, and this is the path we are set upon, for at least the foreseeable future. Refinance if you can, purchase a new (or used, or additional) home if you are inclined, but there doesn't seem to be much of a sense of urgency... for the moment. We are perhaps more optimistic than others that the housing market will strengthen in 2012."

The following are interest rate quotes from Al Hermann of American California Financial :

30 Yr Fixed FHA
Rate	APR
3.625	4.304	Details

Conforming 30 Yr Fixed up to $417000
Rate	APR
3.750	3.895	Details

Conforming Jumbo 30 Yr Fixed $417001 - $625500
Rate	APR
4.000	4.140	Details

Jumbo 30 Yr. to $1.5 Mil
Rate	APR
4.625	4.761	Details

Jumbo 7/1 ARM $1.5 Mil (higher loan amt available)
Rate	APR
3.300	3.463	Details

The following are interest rate quotes from Jan Schott Bank of America, Home Loans jan.schott@bankofamerica.com 310-802-2300 :

Conforming Loans to $417,000

5 Yr Fixed: 2.625% @ 1.000/pts 3.000% @ 0/pts

30 Yr Fixed: 3.875% @ 1.000/pts 4.375% @ 0/pts

Conforming High Balance to $625,500

5 Yr Fixed: 2.500% @ 1.000/pts 3.125% @ 0/pts*

30 Yr Fixed: 3.875% @ 1.000/pts 4.500% @ 0/pts

Non-Conforming Loans to $2,000,000

5 Yr Fixed: 2.625% @ 1.000/pts 3.000% @ 0/pts

30 Yr Fixed: 4.000% @ 1.000/pts 4.375% @ 0/pts

FHA Fixed Loans to $729,750

30 Yr Fixed: 3.875% @ 1.000/pts 4.125% @ 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.