Mortgage Rates Fall to Six Month Lows on Heels of Jobs Report
Following Friday’s Jobs Report, where 288K in nonfarm payroll creation blew away expectations of 210K, many were shocked when mortgage rates moved opposite than anticipated.
Why? Historically when jobs
numbers positively surprise the market, it sends rates skyward. However, interest rates actually fell significantly! This happened thanks to geopolitical drama and unrest overseas which affected bond rates. Since they’re directly correlated to mortgage backed securities, this affected mortgage interest rates.
There is more positive news for the housing market than lower interest rates.
The Pending Home Sales Index (PHSI) rose in March ending 8 consecutive months of declining sales. Plus, data released from Steven Thomas at ReportsOnHousing.com, shows that housing inventory in the OC is on the increase—rising 29% from January with 6,115 active listings.
Low rates and positive market events are great news for buyers and sellers alike because now you can enter the market and lock in rates not seen since 2013. In fact, 30-year fixed rates are currently in the range of 4.120 to 4.24%!
Why Buying is Still the Best
Option in California
According to Zillow’s 2014 Q1 Breakeven Horizon report, buying is still the best route in California. Zillow compares the price-to-rent ratio, home price appreciation, and anticipated rental price inflation to determine that you only need to live in Orange County 2.6 years to make owning a home a smarter financial decision than renting[1].
In fact, sales for properties worth more than $500,000 are up 2.9% from last year. And houses valued at more than $800,000 climbed a whopping 5.4%. And while appreciation played a role in the drop in total overall sales, it looks to be tapering off over the next few months.
By August, Los Angeles and Orange Counties are forecasted to see only a 3.7% rise in prices. And just a 4.2% increase is projected for Inland Empire.
When you combine this with the fact that job expansion is driving greater household growth and lenders are beginning to loosen the reins—becoming more willing to extend credit to borrowers with FICOs between 600-700, more Americans are ready to spend money in the housing market.
This is especially noticeable across the homebuyer sentiment. In fact, according to the PulteGroup Home Index, 74% surveyed feel that the economy improved this year and 85% of millennials and 71% of move-up buyers intending to purchase a home in the future.
Even though appreciation skyrocketed in 2013, buying a home is still as much as 20% cheaper than renting—especially when given the rising rent rates. Take advantage of the low interest rates and ditch writing your monthly rent check. Or, if you’re already a homeowner, consider joining the huge number of “buy-uppers.” Contact your loan officer to lock in your rates before they move higher.
Contact Kurt Galitski and The Kurt Real Estate Group where we will guarantee to save you $10,000 on your next home purchase. Call 877-957-6677 for details.
Kurt Galitski
Meet Kurt Galitski - The Kurt Real Estate Group, your new best friend. Distinctive Strategies that Deliver Record-Setting Results. When you combine Kurt’s passion and knowledge of the real estate market, you really gain an appreciation for what makes Kurt different. But what truly sets him apart from the crowd are his 5 distinctive strategies and his property management… For Kurt, getting into real estate was not an accident, it was a deliberate and calculated decision to deliver a better experience to home buyers, sellers, and landlords that they have ever received before. Today, you could ask any one of hundreds of clients, read his Yelp reviews, or look at his track record of being featured in Orange Coast Magazine in excess of eight consecutive years and you too will say mission accomplished. www.KurtRealEstate.com www.KurtPropertyManagement.com 877-957-6677
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