Now is the time to buy a home in Northern California! If you are currently renting in the area and are on the fence about purchaign a home, now is the time before mortgage rates increase and buyers are priced out of the market as affordability shrinks in the coming years!
While the first rate rise to the Federal Reserve rate in 10 years isn’t directly connected to mortgage rates, it is only a matter of time before rates for home equity lines of credit (HELOC’s) and mortgages creep up. Here in Northern California our real estate market isn’t immune to rate rises, all markets and all buyers not paying cash for homes are affected.
With rates being so low for so long many homebuyers have become accustomed to cheap money and therefore haven’t been too concerned about the rate they receive for their mortgage – as often there isn’t much more than a quarter of a percent difference between different lenders – whether a bank or credit union. However, the past few years, mortgage rates have been at historic lows. Going back to 2012 it wasn’t uncommon to see 30 year fixed rates be as low as 3% with 15 year fixed rates being around 2.5%. Go back further in time to 10-12 years ago, rates were in the 5-7% range. A huge difference compared to today’s 4-4.5%. This has helped bolster the housing market in Northern California after the recession, with prices steadily rising in recent years.
Of course there is no guarantee that a relatively small interest rate rise by the Federal Reserve will actually lead to a bump in the mortgage rates, as what the Federal Reserve most closely influences is short-term interest rates. Interest rates borrowers pay for 30-year mortgages reflect longer-term rates, usually the rate of the 10-year Treasury bond. But still, it could be a message that rates are in general on the up.
For 2015 home sales are expected to number around 5.7 million, up from 5.4 million last year and 4.6 million in 2011. A small rate rise is unlikely to deter most buyers, but the message is clear from the Federal Reserve, rate rises are coming, even if slowly, so the time to lock in low rates is now! Additionally, while rates have been low lending restrictions and loan qualification criteria has increasingly tightened causing many potential borrowers to be unable to obtain a mortgage, this means that if you are a potential buyer looking to purchase a home in Northern California, with the prospect of higher mortgage rates, now is the time to seek mortgage pre-approval with a lender and start shopping for a home!
Is the Greater Sacramento area where you are considering relocation? Are Roseville, Rocklin, Folsom, Citrus Heights, Rancho Cordova and other areas of this beautiful part of Northern California the perfect places for you? If you are looking at living in any of these or the surrounding Sacramento towns and cities Contact Tom Daves today! Or call him at 916-296-5841 for home buyer or home seller real estate advice in the Greater Sacramento area!
Learn how easy it is to let Tom Daves and his team assist you in buying your next Sacramento area home here and when it is time to sell, learn how they make the process as painless as possible and find out more about the Guaranteed Sale program! Tom Daves, BRE# 00581837 has been ranked #1 National Keller Williams Agent Overall out of over 100,000 agents so work with the best in the business. Contact Tom, today!