What a difference a year makes—at least where Costa Mesa home loans are concerned. For what seems like forever, the recommendations of experts, man-in-the-street consensus, and plain old common sense had all aligned to point to the same advice: take advantage of today’s home loan interest rates while you can!

The unanimity was comforting, especially since the decision to sign on the dotted line for a 30-year mortgage is a commitment that stretches decades into the future. But when everybody can agree that the entire history of homebuying verifies the wisdom of taking advantage of a loan offered at historically low interest rates, the only issue is whether the property being financed is reasonably priced.

But now, at the end of last week, Money magazine summarized the reason why that reassuring unanimity had vanished from the scene. It wasn’t just that the week had seen mortgage rates drifting higher—it was the telling contrast with recent history that was most disconcerting. Per Money, the week’s rise of 0.11 percentage points meant—

“The current rate for a 30-year fixed-rate mortgage is 5.55% with 0.8 points paid…
The 30-year rate averaged 2.87% this time last year.”

That near-doubling might seem to be a slam-dunk reason for would-be borrowers to put their pens back in their pockets (and a steep decline in home loan applications indicates that more than a few did just that). Yet a review of the actual historical record of home loan rates puts that simple reaction in jeopardy—and might even encourage would-be buyers to think twice about ruling out mortgage offers at current levels. Over the entire month-by-month recorded history of 30-year fixed mortgages—that is, from April 1971 until last month—the average rate is a surprising 7.77! That’s two full percentage points higher than that 5.55%. Could it be that even now, it might be advisable to lock today’s offer?

If area buyers would find few experts urging that advice, they’d find just as few arguing the reverse—even though both decisions can be rationally concluded based on the evidence. One unambiguous outcome is that the comforting unanimity about the merit of today’s home loan offerings is a thing of the past. What a difference a year makes!

The decision to buy a home (or to list yours) depends on many factors—home loan expense is just one. For assistance with any and all of your Costa Mesa real estate initiatives, we're here to put our years of experience at your service. Do call!

We are built on a philosophy of Heritage & Hustle. The L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976.  It’s L3 mission is to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. The L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, The L3 has grown to a full staff of 25 serving over 300 clients a year. The L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has The L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa  If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to The L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact The L3 today at 714-444-4663 or email us at info@thel3.com


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