Real Estate and Mortgage Rates in California [mortgageloan-processor.blogspot.com]
Question by Peter M: due to the decline in the real estate market, will mortgage rates decrease anytime soon? Best answer for due to the decline in the real estate market, will mortgage rates decrease anytime soon?:
Answer by mbafromuiu
yes, but not for to long. There is a point where mortgage companies will start to raise rates in order to keep up their profits growing. Let's say that they sell 100 mortgages a month at a 20% margin and 100K in profits. In two years, because of the lower market, they can only sell 70 with the same margin their profits are down to 50K. In order to increase their margin they are going to have to raise their rates. This is what happened in the late 70s and early 80s. It wasn't until the government's bailout of Chrylser that consumers gained enough confidence in the housing market that banks started to lower their rates.
Answer by Rush is a band
Housing prices and mortgage rates aren't really linked like that. Mortgage rates are linked to the interest rates on the 10-year bond. Overall, mortgage rates are still near historical lows. It was not uncommon for someone to have a fixed rate well above 7% just 7-8 years ago. In the early 1980's interest rates were very high and mortgage rates were close to 20%. These recent low rates are probably the reason that prices went up. House prices that were unaffordable with mortgage rates of ~8% became affordable to more people as mortgage rates slid downward. This caused more demand for houses which led to higher prices for housing. As interest rates go up, houses become less affordable and more difficult to sell. The prices then stagnate or decline because of high supply (low demand). Mortgage rates tend to drive the housing market, not the other way around.
Answer by George M
YES! Last weeks rate is just the first of many. But, home values are still only half way thru their fall! I read a great real estate pricing article by a top San Diego real estate broker that I believe is the 'last word' on this subject. You can view the article at: http://www.brokerforyou.com/brokerforyou/?p=161 Also, I would recomend subscribing to his real estate blog at: http://www.brokerforyou.com/brokerforyou This guy really calls it like he sees it! Plus, he has been dead on in his forecast. I'm really glad he is located in San Diego and not my area of LA!
Comparing to other areas, California has one of the higher living costs in the United States. This is to a degree because of high property costs. In addition, it is one of the states that have endured heavy property price declines. Therefore, having favorable refinance rates in California is essential if homeowners want to lower the burden of debt and loss of home equity. Gratefully, recent refinance home loan rates in California are record low, facilitating a favorable opportunity to lower monthly home loan payments.
Refinance mortgage rates fluctuate daily. To be able to get the feel of it, it is wise to keep an eye on the movements before coming to a decision. These mortgage rates are offered with a variety of alternatives. There are regular fixed rates, flexible rates and you can buy points or attain a no cost refinance. Consumers would want to pinpoint the lowest rates out of the ones that fit their position best.
Typical fixed rates are ideal in the today's low rate environment since they let people lock these rates for the entire term. Not just in California but throughout the country 30 year fixed rates are quite sought-after offerings for the security and long payment term they offer. Adjustable rates may still be an option for some homeowners if they need to begin with lower interest and expect to trade or refinance the house in several years. One perfect option could be that they get portable fixed rates that they can switch it on to new property when they sell.
Receiving the best rates require a positive credit score, stable income and considerable down payment. Should you not tick each box, you could be offered a little bit worse rates. Consumers might have to realize that there are only few people in America who can get the best of such low rates. For that reason it is important to receive a custom quote and check what rate you would be quoted for your position before you get excited over the posted rates. Related Real Estate and Mortgage Rates in California Articles
