Tag Archives: the economy

Fed Hints At Possible Rate Hikes

The Federal Reserve has held off on raising rates for now, but how long will it last?

Buyers have been very fortunate for the past several years to enjoy what has become historically low interest rates. In 2008, the Federal Reserve dropped their base rate (The rate at which lending institutions can borrow money) to practically zero percent. Of course, consumers pay a bit more on their rates, but even still, home buyers have been able to take advantage of rates as low as 3 and a half percent. Currently, rates stand just below 4 percent.

Why are interest rates so low, and why might they rise again?

You might say that interest rates can reflect economic conditions nationally, and even internationally. In most cases, rates rise or fall based on Tips for first time home buyerseconomic forecasts that include the potential for inflation as our economy improves. That being said, in 2008 the Federal Reserve dropped rates in an effort to stabilize the real estate and credit markets, which were struggling due to issues that affected our economy and put the US on shaky financial footing.

Why would rates rise? As our economy improves, there is more money for goods and services, which in turn may cause prices to rise, or “inflate,” due to demand. There’s a delicate balance between inflation that could get out of hand (Known as “runaway inflation”) and putting systems in place that can maintain our economy without becoming volatile or unpredictable.

Raising interest rates has the ability to control the purchasing power of consumers to the degree that it could make them think twice about how they spend their money. This in turn could help to keep the price of goods and services steady, thus avoiding potential runaway inflation.

The Federal Reserve recently held off on raising rates due to our economy not showing any warning signs of unpredictable inflation. That being said, they may revisit this before the end of the year, with news that rates could rise as early as December.

Don’t wait! Qualify for a loan today!

If you’re on the fence about buying a home, now is the time to find out if you qualify for a mortgage and begin to take advantage of all the benefits of home ownership. Contact Team Avalos today for a no obligation consultation.

 

SCV Home Sales Up Nearly 20 Percent Over This Time Last Year

Santa Clarita single family homes holding at just over $500K, while condos take a leap forward in July.

Recent statistics released by the Southland Regional Association of Realtors showed home prices holding, with single family homes in the Santa Team Avalos Real EstateClarita Valley at an 8 year high, and condo prices jumping $15,000 from June.

The median price of a single family home in the SCV clocked in at $509,500 for the month of July. Condominiums in the valley are currently at a median price of $330,000.

442 homes closed escrow in July, which is a 16% increase over July of 2014. A total of 546 residential properties were listed last month, with 470 homes opening escrow.

Home Mortgage Rates

Home mortgage rates have dropped once again below 4 percent, holding as of the date of this article at 3.93 percent for a traditional 30 fixed rate loan. Some other loan options have even more favorable rates, including: Continue reading SCV Home Sales Up Nearly 20 Percent Over This Time Last Year

Low Rates Spur Huge Jump In Mortgage Applications

January sees highest number of loan applications since 2008.Mortgage applications on the rise in 2015

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

Santa Clarita Home Prices Hold Steady Through September

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 AssociationTeam Avalos Real Estate Santa Clarita 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

Interest Rates Dip Below 4 Percent

Mortgage rates hit their lowest in 18 months. Now is the time to buy!

Who knew? Recent positive economic forecasts have had a positive effect on the real estate industry. Considering it was just a little over a year ago that some financial analysts predicted Mortgage interest rates once again on the declineinterest rates over 5%, it’s amazing to see that, as of October 15th, mortgage rates dropped BELOW 4  percent.

So how did this happen, when rates were expected to climb?

If you go back a year and a half or so to early 2013, we saw interest rates dip to historic lows (Nearly to the mid 3% range). Now, rates have been helped along since November 2008 by federal stimulus package known as Quantitative Easing, which pumped $85 billion per month into the Mortgage-Backed Securities market. This of course gave confidence to investors, which helped the Federal Reserve maintain (and even reduce) loan rates.

In the spring of 2013, the Federal Reserve hinted that they may begin tapering off the amount of monthly stimulus, which caused panic among some investors, who began selling off their Mortgage-Backed Securities. This initiated a brief chain reaction, which forced rates to rise to over 4%, where they have been holding for a little over a year.

In 2014, the Federal Reserve began reducing their stimulus, which is now down to $25 billion per month (Saving taxpayers over a half trillion dollars per year). During this time, interest rates held in the very low 4% range. In the past few weeks, the Fed announced no new changes in rates based on positive economic news in the job and investment markets. In other words, they wouldn’t want to “rock the boat” during what’s becoming an exponential positive economic growth spurt. Continue reading Interest Rates Dip Below 4 Percent

Mortgage Rates Remaining Low Despite Predictions

Qualified home buyers can still get an incredible rate on a home loan mortgage, but weren’t they supposed to jump?

Sometimes the finance world can be tricky business. In most cases, it’s not about the money on hand, it’s about the money that might be made. With that regard, many Mortgage interest rates once again on the declinefinance experts make their living (and a good one at that!) forecasting the financial market. Think of Fritz Coleman. Only instead of telling you it might rain tomorrow, he tells you that mortgage interest rates are going up.

Well, interestingly enough, many forecasters predicted mortgage rates would jump to over 5 percent by 2014 and yet, they have remained steadily just below 4 1/2 percent.

So why DID financial experts predict a rise in mortgage rates?

Don’t be fooled. Oftentimes financial experts are fairly correct in their predictions about the money and mortgage markets. They take into account not only what’s happening in the real estate market, but the national and international financial markets as well. In this day and age, it’s all integral and relevant to any asset that may increase (or decrease) in value, such as real estate. Continue reading Mortgage Rates Remaining Low Despite Predictions

Thinking About Selling Your Home in 2014? Here Are 3 Top Reasons Why You Should!

If you’ve been “on the fence” about selling, now is a good time to take advantage of the real estate market.

2013 has been the best year in real estate since before the recession hit the market hard just over 5 years ago. With sales figures reaching double digit percentages over Team Avalos Real Estatelast year coupled with a national economy in full recovery, all signs point to continued good news for the 2014 real estate market.

In the past few years, we’ve encountered many home owners who have considered selling, but have sat “on the fence” for various reasons. Mainly, they wondered if they could get top dollar for their home. If you are considering selling your home for any reason, here are three great reasons why you should get more serious about your decision in 2014:

1. Housing inventory is low.

One thing that has driven the housing sales boom in 2013 was low inventory…too low, actually. There were certain times during 2013 where the Santa Clarita Valley sat on less than a 30 day “supply” of available residential real estate for sale. As it stands now, the SCV only has about a 45 day supply. A good, healthy real estate market in any community will have enough housing to make up about a 6 month supply. In the Santa Clarita Valley, a 6 month supply equates to between 1200-15oo homes on the market.  Continue reading Thinking About Selling Your Home in 2014? Here Are 3 Top Reasons Why You Should!

Fed Eases Mortgage Stimulus, Rates Hold Steady

Federal Reserve will reduce amount spent monthly on Mortgage Backed Securities.

For just over 5 years, the Federal Reserve has purchased Mortgage Backed Securities (MBS) to the tune of $85 billion as part of the stimulus program enacted in Federal ReserveNovember 2008. Known as Quantitative Easing (QE), this purchase of bonds helped to shore up the real estate market by helping to keep interest rates low. QE gave confidence for investors because of the security the ongoing stimulus provided to the market.

Late last spring, the Federal Reserve hinted that they may eventually end Quantitative Easing due to marked improvements in the nation’s economy. Investors, nervous that they may no longer rely on the stimulus guarantee, initiated a selloff of MBS that caused mortgage interest rates to jump nearly a full percent. The Fed changed their course late in the summer, and QE continued without any changes.

Changes ahead, but how will they affect the real estate market?

On December 18th, the Federal Reserve announced they would reduce Quantitative Easing by $10 billion per month. Good news from an economic standpoint in that taxpayers will be saved $120 billion during the course of the year. So far, the stock market has reacted positively, with markets closing up since the news was announced. Interest rates have not been affected either…yet…but so far the outlook appears positive.

All of this seems to be good news to start the new year. November saw home prices in Santa Clarita the highest in five years, when values peaked just before the recession took hold. Overall we’ve seen significant gains in the housing market in 2012, and with the improvement of economic conditions, we should see continued gains into 2014.  Continue reading Fed Eases Mortgage Stimulus, Rates Hold Steady

Santa Clarita Housing Prices At Pre-Recession Levels

Positive signs continue to aid full recovery of the real estate market.

For the first time in five years, the average price of single family homes in the Santa Clarita Valley rose to $450,000, according to the Southland Regional Association of Santa Clarita Real EstateRealtors. And while condominium prices dropped slightly last month, condo sales volume reached the highest level since 2006. This is great news for anyone considering selling their home.

This news comes on the heels of other positive signs in the Santa Clarita Valley real estate market, including a drop in interest rates and a slight rise in available home inventory for sale, all good news for home buyers.

Short Sales and Bank-Owned Properties Dropping As Well

The number of Pre-Foreclosure Sales, or short sales, has also dropped dramatically in the Santa Clarita Valley. Where as recently as last year we saw short sales accounting for over 47 percent of overall real estate sales, in August of this year they stand at 18.7 percent. Bank Owned, or Real-Estate-Owned (REO) properties stood at slightly over 4 percent.  Continue reading Santa Clarita Housing Prices At Pre-Recession Levels

Federal Reserve To Continue Bond Purchases. Could This Bring Interest Rates Down?

The Fed will continue it’s $85 billion monthly guarantee of Mortgage Backed Securities despite earlier hints at tapering off.

After months of speculation that the Federal Reserve will end its stimulus for Mortgage Backed Securities (MBS), causing a ripple effect in the stock market and inadvertentlyFederal Reserve raising mortgage interest rates, key policy makers have made the decision to continue the program until further notice.

Citing the desire to see more improvement in the economy, the Federal Reserve made it clear that they will continue to guarantee MBS. The stimulus program was put into effect in November 2008, during the dark days of the real estate collapse and Great Recession as a way of maintaining low interest rates in preparation for an eventual economic recovery. The stimulus program, known as Quantitative Easing,  provides $85 billion per month in guarantees for MBS. Other funds have helped to purchase debt issued by government backed agencies such as Fannie Mae and Freddie Mac.

This past spring, the Federal Reserve hinted that they may eventually discontinue the stimulus in light of more positive economic news coming from Washington this year. On the heels of this revelation, mortgage interest rates jumped over 1 percent during the summer months and are currently holding just below 5 percent. Rates did take a very slight dip (.10 percent) after the Fed made their announcement, and the Dow Jones Industrial Average shot up 80 points. Continue reading Federal Reserve To Continue Bond Purchases. Could This Bring Interest Rates Down?