Is This Year The Right Time For You To Make That Home Purchase? California Platinum Loans Explains How Mortgage Rates Can Guide You Make That Decision Today

Did you know that most mortgage loan professionals have their calculators at hand all of the time? You don’t have to do that, but if you’ve been thinking about buying a house in the next three to twelve months, how can you choose which is the right time? Many people look at home purchase prices to guide their decisions. With prices steadily increasing, you might find that the longer you wait to buy, the fewer homes you’ll find available in your price range. But what about interest rates? Should they influence your decision to buy a home in the year to come?

Yes — mortgage interest rates can make a big difference in home buying

Would you believe that in 1981, home loan interest rates averaged over 18%? Between 1980 and 1982, the lowest average 30-year fixed-rate mortgage was 16.35%. If you bought a $300,000 house in 1981 with a 20% down payment and a 30-year mortgage at an interest rate of 18%, your monthly principal and interest would be $3,617. At a 5% interest rate, your principal and interest would be $1,288. So, yes, mortgage interest rates can make a big difference.

Fortunately for homebuyers, interest rates have been much lower than 18% in the past ten years. The average interest rate in 2018 was 4.54%. In 2019, this average dropped under 4%. Bankrate reported that 90% of mortgages as of 2018 had interest rates between 3.5% and 6%. 

Fannie Mae and Freddie Mac, the two largest government-affiliated mortgage corporations, are predicting that 30-year fixed-rate mortgages will average between 3.6% and 3.7% throughout 2020. The Mortgage Bankers Association predicts that interest rates will be about 3.9% throughout 2020. Other organizations, including the National Association of Realtors, are predicting 3.6% average interest rates for a 30-year fixed-rate mortgage.

Will these low rates last forever?

It’s unlikely that the current low mortgage interest rates will stay the same indefinitely. If you have a higher interest rate home loan, you may be able to refinance for a lower interest rate and lower monthly payments. If you’re interested in buying a house over the next year, you should be aware that rates began to decrease in November 2018, but trends like this don’t last forever. Right now, mortgage interest rates can make many homes affordable and can help you to lock in a 30-year or 15-year fixed-rate home loan for the home you want to buy.

Sources

https://www.investopedia.com/mortgage/mortgage-rates/house-price-vs-interest-rate/

https://www.valuepenguin.com/mortgages/historical-mortgage-rates

https://www.dallasnews.com/sponsored/real-estate/2019/11/23/experts-predict-where-mortgage-interest-rates-land-in-2020/

California Platinum Loans

  https://californiaplatinumloans.com

The COVID-19 Outbreak Has Caused Zillow to Pause Its Home Buying Program: Find Out How This Can Have An Impact On Your Home-Buying Process

Online real estate service Zillow has a home buying program in 24 states. It stopped the program March 23, 2020 due to COVID-19. As the pandemic has continued, home buying and selling has been changed in every state, including ones with no “stay at home” or “shelter in place” orders

In California, after initial disruption due to COVID-19, by the last week of March, real estate was added to the state’s “essential business operations.” This meant that home sales can continue, but precautions are advisable. A survey conducted by the California Association of Realtors in mid-March found that 54% of its members saw a decline in buyer interest. Some sellers have also backed out of their sales due to COVID-19, but the overwhelming majority were staying in the market.

California real estate pros are working virtually

The California Association of Realtors requested that all of its members should cease open houses shortly after Gov. Gavin Newsom announced that all Californians should stay at home starting March 19, 2020.

Before COVID-19, 75% of California’s realtors weren’t offering virtual tours or sales, but now they’re essential. Virtual closings are possible too, and are being used to continue the buying and selling process.

What does this mean for your home buying or selling?

Count on working with real estate professionals using technology. From virtual home tours to conducting the sales and negotiation process online, you can complete a real estate transaction without personal contact. Using virtual signing methods can eliminate the risk of virus contamination.

Interest rates are low and helping buyers and sellers

After the Federal Reserve lowered its interest rate to zero, interest rates increased for about a week. Real estate professionals found that trend hard to explain, but interest rates have adjusted and as of April 1, 2020, were lower than ever for all mortgage products, from 30-year fixed-rate loans to 15-year fixed rate home mortgages and 5/1 ARMs. Refinancing mortgage interest rates are also low, and experts predict that there will be many opportunities to refinance in the coming months.

California’s economic experts predict that with the $2 trillion Federal stimulus bill, the real estate market will not suffer much due to the COVID-19 crisis. The state’s economy is expected to recover quickly once the stimulus takes effect and people are back to work when the crisis is over.

Sources

https://www.fool.com/investing/2020/03/24/zillow-pausing-home-buying-through-zillow-offers-s.aspx
https://www.mashvisor.com/blog/california-real-estate-market-coronavirus/

California Platinum Loans

  https://californiaplatinumloans.com