Rates have remained low for the past several years, but when should they be raised? And just what IS the Federal Reserve, anyway?
We talk a lot about interest rates, and for obvious reasons. Unless you are paying cash for a home, then they play prominently in just how much home
you can afford.
Yes, rates have risen and fallen over the past few years, and today we’re not talking about interest as it pertains to the value of loans that are bought and sold on the stock market (Which can also affect rates); we’re instead talking about the Federal Reserve.
What is the Federal Reserve?
Established in 1913, the Federal Reserve acts as the nation’s bank. They set financial policies and terms that banks and lending institutions follow, and also loan money to those banks at a base interest rate that is below what the consumer would pay. The following video provides a brief and easy to understand explanation of how the Federal Reserve works.
Will interest rates go up?
Good question. Federal Reserve Chair Janet Yellen has more than hinted that it’s possible rates could rise sometime this year. If the Fed does raise the base interest rate, it will definitely affect a buyer’s loan limit or their mortgage payment amount. The best thing to do if you’re on the fence about buying a home is to lock in your rate now.
We are your choice for buying and selling real estate!
Team Avalos Real Estate is dedicated to helping you achieve all of your real estate goals, and our goal is to make sure your experience is positive and achieves the best results whether you’re buying or selling a home in the Santa Clarita or San Fernando Valley areas. Contact us today for a no obligation consultation.
Team Avalos Real Estate
Keller Williams VIP Properties
25124 Springfield Court, Suite 100
Valencia, CA 91355
Office: (661) 290-3743
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Home prices hold fairly steady going into 2015 in the Santa Clarita Valley.
New statistics out from the Southland Regional Association of Realtors showed home prices holding steady as we move head on into 2015.
January showed single family homes dropping in median price by $15,000, which is not uncommon for this time of year as sales slow down slightly after the holidays. What’s interesting is that condominiums in the Santa Clarita Valley increased in January by $15,000 over December 2014. The last time the SCV saw condo prices jump (rather than fall) in January was in 2006.
This interesting rise in condo prices could be attributed to a few factors:
Federal Housing Administration (FHA) guideline changes for first time home buyers.
January sees highest number of loan applications since 2008.
With mortgage rates holding at below 4 percent for the past few months, it’s no wonder home buyers are seeing the opportunities available to them in the form of greater purchasing power.
According to the Mortgage Banker’s Association, nationwide mortgage applications were up 49 percent as of the week ending January 9th 2015, which is the largest increase since 2008. What’s interesting about this phenomenon is that it flies in the face of predictions made by some financial analysts who predicted mortgage rates would rise.
So why have mortgage rates remained low despite predictions?
We’ve seen the foundations of not just an economic recovery, but a true rebound in the past 12 months. Nationally, unemployment rates have dropped, while the GDP (Gross Domestic Product) surpassed expectations in the latter part of 2014. Stocks have been strong, as have Mortgage-Backed Securities. Strong investment in the stock side of real estate has helped maintain low rates as well. Consumer confidence has also soared in the wake of lower gasoline prices, putting more money into peoples’ pockets. Continue reading Low Rates Spur Huge Jump In Mortgage Applications→
Given the reality of investment growth, real estate overall is one investment you can count on.
Yes, it occasionally has its ups and downs, but otherwise, over time real estate steadily increases in value more so than any other investment with less risk. Of course, the size and type of investment depends on your own personal (and sometimes) professional needs and desires.
For example, if you plan on moving to a community to purchase a home where you plan on staying long term, perhaps even living there long enough to pay off your mortgage, then the positive growth benefits are without question. Let’s do some math:
15 years ago in September of 1999, the median price of a single family home in Santa Clarita was $224,900. Flash forward to September of 2014, and that home’s median price is $490,000. That’s nearly a 118% increase in your investment.
Conversely, if you bought your home in September of 2013, you will already see an increase of nearly 14% in your investment.
As we mentioned at the start however, the real estate industry occasionally does have its ups and downs. Just like any investment, there is an element of risk. For long term residential investors, your risk is minimized as you’ll ultimately see growth in your equity. Continue reading Was Your Home Purchase a Good Investment?→
Low interest rates continue to spur home sales in the SCV.
Single family home prices remained unchanged last month from August, holding steady at a median price of $490,000 according to data released by the Southland Regional Association of Realtors.
This comes as good news for sellers at a time when the market begins to shift and slow as the summer season comes to a close. Condominiums did take a slight dip last month, but dropped only $5,000 in median price overall.
Median equity in single family homes has risen $57,100 since January, with condos rising $30,000 over the course of this year. Considering your investment options, where else can you increase your overall wealth by this much in only 9 months?
Will mortgage rates remain low?
A few weeks back, rates dipped below 4 percent for the first time since the spring of 2013. This spurred a lot of not only buying activity, but a mini “refi boom” for homeowners looking to refinance their mortgage to a lower rate. They have ticked up a few 10ths of a percent, and are currently holding just over 4 percent, but even still, these are incredible rates, considering the historical average (Taken over the past 40 years) hovers right around 8 percent. The big question is, of course, will the STAY low? Continue reading Santa Clarita Home Prices Hold Steady Through September→
More requests from buyers leave agents scrambling to find homes for sale.
Santa Clarita has seen a decent summer as far as real estate goes. Prices and interest rates have remained steady, and we have seen an increase month over month in listings and sales, as well as inventory for sale.
Lately however, it seems there is a late summer surge with regard to buyers looking for homes and, for the first time in quite a while, some real estate agents are scrambling to find homes that will satisfy their buyers’ needs.
So what might be causing this end of summer buying spree?
Interest rates are still holding in the low 4 percent range for qualified buyers, and even low for certain types of loans such as 15 year fixed and FHA loans. It’s a great opportunity for buyers to flex their purchasing power and get into a home before the end of the year. Continue reading Is Santa Clarita Seeing a Mini Real Estate Surge?→
Low interest rates and more homes for sale in the SCV are giving buyers more options this year.
Data released by the Southland Regional Association of Realtors for the month of July show some interesting trends that are creating more opportunities for buyers, while still benefiting sellers as well.
The median price of single family homes dropped by nearly $14,000 from June, and condo prices dropped by $5000. That being said, sellers should take note that price fluctuations typically happen when the market heats up. We have also seen an increase in the number of escrows opened, and closed, during July…more good news for sellers. A total of 500 homes were listed for sale last month, with 415 escrows opened, and 373 escrows closing. Single family home prices are up by $35,000 from July of last year.
We’re still asking the question: “Why rent, when you can own?”
A lot of you who are still renting do so because you may think your choices and options are limited when it comes to buying a home. Pricing and financing are always two big concerns that keep potential home buyers on the fence, but with interest rates still incredibly low, your purchasing power is at its best. As far as financing goes, there are several options that can create opportunities to get into a home with low money (or in some cases, no money) down. Continue reading Is Santa Clarita Shifting To a Buyer’s Market?→
After having a lackluster start at the beginning of 2014, we’re seeing a huge gain for attached homes.
Numbers recently released by the Southland Regional Association of Realtors show the median price of condominiums in Santa Clarita ticking upward again in June of this year. This is the third straight month of significant gains, increasing by $9000 in equity over May. Condo prices have increased a total of $40,000 since the beginning of 2014.
Things are heating up in the Santa Clarita Valley real estate market.
This is the perfect time of year to consider buying or selling a home. It’s the best opportunity for families to take advantage of school breaks in transitioning to a new home and a new neighborhood.
In Santa Clarita, we’ve seen single family home prices rise over 15 percent in the past year, and condo prices jump $46,000 in equity. For homeowners, this is great news. Those who are considering selling their homes should see these rises as a great opportunity to get the best value for their home.
Homes in High Demand
Late last year, it was predicted by some financial experts that mortgage interest rates would rise to over 5 percent due to the reduction of federal dollars that had stimulated the mortgage-backed security market. Even with a $30 billion monthly reduction, interest rates are still hovering in the low 4 percent range. This news is bring out qualified buyers who are looking to take advantage of their increased buying power and find the home of their dreams. Continue reading Summer Home Buying Season Hits The Santa Clarita Valley→
A lower interest rate can improve your purchasing power when it comes to buying a home.
INTEREST RATES ARE STILL INCREDIBLY LOW!
We regularly shout it out to remind home buyers not to delay if they are on the fence about purchasing property. As of the date of this article, mortgage rates are still hovering around four and a half percent. When you consider that the historic average is around 7 and a half percent (Based on data collected since 1971), this gives qualified buyers a great opportunity to either buy a larger home, or maintain a lower interest payment.