The Washington Post provides the latest housing statistics. What do they mean?
As always, as you go inland, you will see better prices, but not necessarily many more total great opportunities for value. One home I am aware of just listed at $100,000 over the highest market estimate for that home.
The good news is that mortgage rates continue to be super low – under 4% for 30 year fixed depending on the qualifications of the buyer. One pundit mentioned the other day that this is good news now, but might cause some reduction in the home value when rates go up in the future. This might be true, but in the West Los Angeles Market there is not going to be increasing supply of single family dwellings. If anything that supply will decrease as some homes are being converted to multi-unit dwellings.
If you are contemplating purchasing a home in West LA, and would like to have a conversation about your options, call Bill Rayman at
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average fell to 3.78 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.86 percent a week ago and 4.32 percent a year ago.
The 15-year fixed-rate average dropped to 3.06 percent with an average 0.6 point. It was 3.1 percent a week ago and 3.32 percent a year ago.
Hybrid adjustable rate mortgages were mixed. The five-year ARM average slid to 2.97 percent with an average 0.5 point. It was 3.01 percent a week ago and 3.02 percent a year ago.
The one-year ARM average held steady at 2.46 percent with an average 0.4 point.
“Housing starts dropped 17 percent to a seasonally adjusted pace of 897,000 units, below market expectations,” Len Kiefer, Freddie Mac deputy chief economist, said in a statement. “However, housing permits increased 3 percent in February. As we head into spring, home builders remain positive about home sales in the near future although the NAHB Housing Market Index dropped another [two] points to 53 in March.”
Meanwhile rising interest rates have put the brakes on mortgage applications, according to the latest data from the Mortgage Bankers Association.
The market composite index, a measure of total loan application volume, decreased 3.9 percent. The refinance index fell 5 percent, while the purchase index dropped 2 percent.
The refinance share of mortgage activity accounted for 59 percent of all applications.
The consensus seems to be that the Fed will raise rates later this year. This is likely to be a very modest increase in the Fed rate, and doesn’t mean that mortgage rates will increase at all. Mortgage rates are only somewhat influenced by the Fed rate. Supply and demand for mortgage capital and the cost of bonds to underwrite mortgages are more critical to market rates for mortgages.
As noted by The Washington Post, mortgage rates have been moving up and down in a very small range for months, even years. There is no clear evidence that a boom in housing sales is anywhere on the horizon. While a shortage of available properties, and the increases in rental prices continue to drive up housing prices in many markets, it has not taken on boom proportions.
As noted in earlier posts on this blog, this is a good time for you to purchase a home if this is a good time for you to purchase a home. In other words, don’t rush out and buy to beat a market trend, and don’t stay out of the market to try and take advantage of some future pricing or mortgage interest rate advantage. At this time, it seems unlikely that interest rates will go much lower than these historically low rates, but they also don’t seem headed higher. Home prices seem likely to trend higher.
As with all prognostications about any market, as soon as the prediction is made, it could be dead wrong. One things we can be certain of: if you are looking for a mortgage on a home for you and your family, or for investment, we can help you find the very best options for your situation.
Bill Rayman Home Mortgage
12121 Wilshire Blvd
LA CA 90025