Mortgage rates are good and low, but they’ve been good, low and steady for the past several months. Freddie Mac’s 30-year fixed rates averaged 3.93% throughout 2019. And rates have been at 3.75% or lower for the past 2½ months.
Economist Raymond Sfeir, director of Chapman University’s Anderson Center for Economic Growth, attributed the recent spike to the nation’s robust economy.
“(The) unemployment rate is 3.5%, with 2.3 million jobs added last year, and income is increasing,” he said. But he added, “I will be extremely surprised if we can maintain such a high rate of increased refinancing week after week.” There also has been an increase in purchase money loans because of home sales. Nationally, the Mortgage Bankers’ purchase index increased 16% from the previous week.
Pointing to high demand and low supply, Steven Thomas of Reports on Housing says that Southern California will see 5% in property appreciation this year. Using Orange County as an example, he observed a 4% decrease in listings in 2019 from the year before. Last month, listings fell a whopping 12% from December 2018. “Lower interest rates are the rocket fuel that propels our market,” Thomas said.
Advice for home buyers: Do a no-cost home loan where you accept a slightly higher rate in exchange for the lender covering all of your refinance or purchase closing costs. You will then have opportunity to do another no-cost refi later when rates fall further.
Well-qualified borrowers can get the following fixed-rate mortgages without cost: A 30-year Federal Housing Administration (up to $442,750 in the Inland Empire, up to $510,400 in Los Angeles and Orange counties) at 3.375%, a 15-year conventional at 3.5%, a 30-year conventional at 3.75%, a 30-year conventional high-balance ($510,401 to $765,600) at 4.0%, and a 30-year jumbo (over $765,600) at 4.625%.
New eye catcher loan program: For loan amounts up to $3 million, a 40-year, fixed-rate mortgage at 4%, interest-only for the first 10 years.
Source of information for this article is that by columnist Jeff Lazerson at the Orange County Register (January 19, 2020) and Reports on Housing.
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By Harrison K. Long, Professional real estate representative and REALTOR®, broker associated with HomeSmart Evergreen Realty. Real estate broker, CALBRE 01410855. Also an attorney member of CA State Bar Association #69137.
By Christi Anthony Long, Professional real estate representative and REALTOR®. Contact by cell at 949-212-5427. Associated with HomeSmart Evergreen Realty. CALBRE 01438859.
“The the Economy is Booming with Lots of Jobs and Loan Rates Continue to be Extremely Low and Good for Home Buyers”
