Have mortgage interest rates bottomed?

Mar 182012

Treasurys plunge as traders, Fed bet on economic strength; mortgage rates may creep up

By Associated Press, Published: March 14

WASHINGTON — The bond market is betting on a stronger economy.

Prices for U.S. Treasury debt plunged for the fifth straight trading session Wednesday, and the yield on the benchmark 10-year note spiked to its highest level since October.

Money poured out of bonds and into stocks after rosy words on Tuesday from the Federal Reserve gave traders confidence that the economic recovery is strengthening. Major stock market averages are at or near four-year highs.

Treasury yields — and interest rates that take their cues from Treasury yields, including mortgage rates — remain near all-time lows. So while mortgage rates may creep up, they should remain historically low.

Even with the economy getting stronger, the Fed plans to keep short-term interest rates near zero through 2014. And demand is strong for long-term Treasurys because the dollar and the U.S. government still look like safer bets than the euro and other nations.

More evidence of the hunger for U.S. debt came Wednesday afternoon, when the Treasury Department auctioned $13 billion in 30-year bonds. Bids came in higher than current market prices.

The bonds were priced to yield 3.38 percent. Similar bonds trading on the open market fetched a yield of 3.41 percent.

The yield on the 10-year Treasury note was 2.27 percent as of 4 p.m. Eastern time Wednesday. It hasn’t closed above that level since Oct. 28, but the yield is far lower than the 3.36 percent level where it settled a year earlier.

Prices rose and yields fell for U.S. government debt almost all last year. Investors were willing to pay for the safety of U.S. debt because other investments, like volatile stocks and the euro, seemed much riskier at the time than they are today.

The interest rates that Americans and businesses pay on mortgages and other loans tend to track the 10-year note, and rising yields should make the interest rates on those loans increase.

With the spring home-buying season about to start, the average interest rate on the most popular mortgage loan, the 30-year fixed, fell last week to 3.88 percent, a hair above the 3.87 percent it hit three weeks ago. That was the lowest since long-term mortgages were popularized in the 1950s. A year ago, the average was 4.88 percent.

Corona Del Mar Overview

Median home price is $1,253,000. Based on a rental parity value of $804,000, this market is over valued.

Monthly payment affordability has been improving over the last 1 month(s). Momentum suggests unchanging affordability.

Resale prices on a $/SF basis declined from $753/SF to $740/SF.

Resale prices have been falling for 1 month(s). Price momentum suggests falling prices over the next three months.

Median rental rates increased $216 last month from $3,175 to $3,391.

Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months.

Market rating = 1

Proprietary OC Housing News home purchase analysis

2495 OCEAN Blvd Corona Del Mar, CA 92625

$14,395,000 …….. Asking Price

Cost of Home Ownership
——————————————————————————
$14,395,000 …….. Asking Price
$2,879,000 ………… 20% Down Conventional
4.53% …………. Mortgage Interest Rate
30 ……………… Number of Years
$11,516,000 …….. Mortgage
$2,888,894 ………. Income Requirement

$58,555 ………… Monthly Mortgage Payment
$12,476 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$3,599 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$74,630 ………. Monthly Cash Outlays

($4,550) ………. Tax Savings
($15,082) ………. Equity Hidden in Payment
$4,846 ………….. Lost Income to Down Payment
$3,619 ………….. Maintenance and Replacement Reserves
============================================
$63,462 ………. Monthly Cost of Ownership

Cash Acquisition Demands
——————————————————————————
$145,450 ………… Furnishing and Move In at 1% + $1,500
$145,450 ………… Closing Costs at 1% + $1,500
$115,160 ………… Interest Points
$2,879,000 ………… Down Payment
============================================
$3,285,060 ………. Total Cash Costs
$972,800 ………. Emergency Cash Reserves
============================================
$4,257,860 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..

We're sorry, but we couldn't find MLS # U10004938 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

	$7,995,000 3004 OCEAN Blvd		0.3 miles 5 bd / 5.75 ba 5,039 Sq. Ft.
	$8,250,000 3235 OCEAN Blvd		0.46 miles 4 bd / 3.5 ba 7,000 Sq. Ft.
	$10,900,000 1509 East BAY Ave		0.63 miles 5 bd / 4.5 ba 14,325 Sq. Ft.
	$9,999,000 1408 East BALBOA Blvd		0.69 miles 6 bd / 5 ba 5,500 Sq. Ft.
	$6,395,000 174 SHORECLIFF		1.02 miles 5 bd / 6.5 ba 7,000 Sq. Ft.
	$3,899,000 1400 SAN MIGUEL Dr		1.05 miles 4 bd / 5 ba 6,000 Sq. Ft.
	$5,249,000 441 ISABELLA Ter		1.06 miles 5 bd / 4.25 ba 7,300 Sq. Ft.
	$5,595,000 4501 FAIRFIELD Dr		1.12 miles 4 bd / 4.5 ba 5,900 Sq. Ft.
	$10,900,000 2 PREMIERE Pt		1.42 miles 6 bd / 6.5 ba 9,800 Sq. Ft.
	$15,800,000 42 PELICAN POINT Dr		1.46 miles 4 bd / 6 ba 8,800 Sq. Ft.

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