How’s The Market
Despite the Federal Reserve raising their interest rates, home loan prices are at an almost record low.
Interestingly enough, there was potential “doom and gloom” on the horizon as spelled out by some analysts late last year in light of the Federal Reserve’s decision to finally raise the rate they charge lenders to borrow money.
You’d think then, that mortgage rates would instantly rise as a result, right? Wrong!
In fact, 2016 has begun with home loan interest rates once again hovering near record lows. Having dropped below 4 percent, home owners, buyers, and sellers are taking advantage of what may be an “extended reprieve” from rising rates. Continue reading
It’s a great time for both home buyers and sellers in the Santa Clarita Valley.
First of all, with available housing inventory on the lower side of nominal (somewhere in the mid 500’s), most sellers are confident that they can sell their home relatively quickly at market rates, which climbed nearly 15% in 2014.
Mortgage rates have bumped up (very) slightly, but are still well below 4 percent, which is great news for both buyers and sellers? Why is it great news for sellers? Well, for the most part, many sellers turn into buyers once they have their home in escrow, so the “win-win” is in full effect. Homeowners are excited as well, being able to take advantage of lower rates to refinance to a lower monthly mortgage payment, or access equity to make home improvements or other investments. We’re continuing to see mortgage loan applications jump as a result of low interest rates. Continue reading
Housing prices remain steady, although we’re seeing some signs of the end of the “summer rush.”
August showed a steady pace in the Santa Clarita real estate market, with new information released by the Southland Regional Association of Realtors.
While there were no “wild rides” real estate-wise, we did see a market that held its own through what most consider the “dog days of summer.”
Median home prices and sales remained somewhat the same as July, with median sale prices holding at $415,000, which includes both single family residences and condominiums. We saw a slight drop in the number of home listings at 441 for August, compared to 500 in July, but the number of escrows opened and closed barely changed month over month.
Santa Clarita also saw only a slight drop in the median list price in August at $447,000 compared to $459,000. This accounts for typical pricing adjustments as the summer rush comes to an eventual close. Continue reading
Loan rates have not been affected despite more stimulus cuts by the Federal Reserve.
Some financial analysts were concerned that rates would begin to rise on the heels of the most recent cuts to the federal stimulus practice of Quantitative Easing (QE), which has dropped to $25 billion per month, down from its high of $85 billion at the beginning of this year.
This brings good news to home buyers concerned that economic conditions may spur rate hikes, which may affect their ability to qualify for their desired home loan amount.
Is it a buyer’s market?
While 2013 was a whirlwind market due to an extremely low inventory of available homes for sale in the Santa Clarita Valley, we’re seeing a balance this year as more homes are being listed with sellers still taking advantage of rising home prices. The median home price of a single family residence has risen $48,000 since January of this year. Continue reading
Cut in federal mortgage securities has opposite effect of predicted rising rates.
November 2008: The stock market was dropping like a stone. Mortgage defaults began to skyrocket. Some major financial corporations either toppled, or were at least teetering. Things weren’t looking good.
As part of the federal stimulus package known as TARP (Troubled Asset Relief Program), the Federal Reserve authorized an $85 billion monthly stimulus that would back Mortgage-Backed Securities (MBS). This monthly expense was put in place to ease troubled financiers and investors that they could still count on the mortgage market for a guaranteed return.
While this stimulus, known as Quantitative Easing (QE), did not instantly solve the real estate crisis that ensued as part of what’s now known as the Great Recession, mortgage interest rates did in fact remain low, and actually dropped to historically low levels in early 2013 (Down to the mid 3 percent range).
In the spring of last year, Federal Reserve Chairman Ben Bernanke gave word that, based on economic improvements, the QE stimulus would begin to taper back. This caused a stir in the mortgage market industry, and selloffs of Mortgage-Backed Securities began in earnest, driving up interest rates over 1% (Which were still incredibly low). Continue reading
Is this a sign of a shift in the Santa Clarita real estate market?
The Southland Regional Association of Realtors released their statistics for the month of May, revealing that single family home prices made no gains over April. Currently single family homes are holding at a median price of $485,000 in the Santa Clarita Valley.
Condominium prices in the SCV did bounce upward nearly 6 percent last month, settling in at $281,000. Condos have had a bumpy ride in the past year or so, with a few ups and downs along the way. They had topped out briefly at $295,000 in November 2013 before taking a dip at the beginning of this year, but overall their median equity has increased by over 12 percent since January.
Condos may have gained more appeal in light of the fact that single family homes are becoming out of reach for many entry-level home buyers. Continue reading
Year-Over-Year averages for the Santa Clarita Valley show a trend toward a stable real estate market.
For example, taking a look at statistics provided by Southland Regional Association of Realtors from March of 2014 and comparing them to what was going on in March of 2013, we find some interesting facts that can be useful to both buyers and sellers:
Available homes for sale inventory has risen 47%
Total active listings in March of 2013 reached 403, while there were 752 available homes for sale a year later. However, this can hardly be considered an inventory glut. We’re still very short of available properties for sale. This number indicates roughly about 45-60 days worth of inventory, whereas a completely balanced market will have a 4-6 month supply on hand. Continue reading
The love triangle between stocks, bonds, and interest rates can make for strange bedfellows.
As industry professionals, we tend to throw these phrases around without considering whether anyone really understands what we’re talking about. In all honesty, what does this have to do with whether you can afford a home or not?
Well, we’ll take this opportunity to explain why news from the financial marketplace can affect your home purchasing power. First, let’s get a few definitions out of the way: Continue reading
New statistics show a growing number of homeowners are no longer upside down on their mortgages.
Good news for homeowners, especially those looking to sell. Statistics recently released by the Federal Reserve and CoreLogic show that over 4 million homeowners once again saw positive equity in their property values last year. This is a big sigh of relief, especially for those struggling to hold onto their homes.
The Federal Reserve’s quarterly “Flow of Funds” report showed that homeowner equity climbed to its highest point in eight years, while the study conducted by CoreLogic showed an impressive shrinkage of “underwater” mortgages (IE: A mortgage value that’s actually higher than the Fair Market Value of the property itself).
at 12.6%, California leads the way in overall lowest number of underwater mortgages than the national average of 13.3%. Many non-coastal communities in California suffered serious falloff of home prices during the Great Recession, so this is especially good news for homeowners hoping to recoup those losses. Continue reading
Thinking Outside The Box When It Comes To Financing Your Home Can Save You Money
Defying predictions by financial experts that they’d rise to well over five percent, home mortgage rates are still amazingly low. As of this article date, conventional fixed rate mortgages are at just under 4 and a half percent for qualified buyers. A conventional mortgage is typically one that lasts 30 years at a set interest rate.
This is great news for those looking to purchase a home. But did you know that rates are actually even cheaper if you consider other options? What follows are alternatives to conventional mortgages, along with their current interest rate (As of March 12, 2014).
15 Year Fixed Rate Mortgages/3.48%
This is a great alternative for home buyers looking to save money on their interest rate, while paying off their mortgage in half the time it takes for a conventional home loan. A 15 year fixed rate mortgage allows the borrower to pay down principle more quickly as well, which helps to increase the equity in their property. If there is a downside, it’s that the monthly loan payment will be higher since you’ll be paying it off twice as fast. Continue reading