Ask any grandparent: “is it actually true that Costa Mesa mortgage rates averaged more than 18%?” They’ll tell you. It happened. And that was less than 40 years ago.

The reason to revisit such an unimaginable scenario isn’t that anyone expects Costa Mesa mortgage rates to repeat that history anytime soon (or anytime, period). It’s useful to recall because the current era of incredibly low home loan rates has been going on long enough that it’s beginning to seem to be the natural order of things.

Psychologists recognize the human tendency called “normalcy bias”—the inclination to overestimate the likelihood that current circumstances will continue. That would be harmless enough, were it not for the fact that it leads otherwise rational humans to discount the possibility of change—even if a threatening change could be avoided. In the current instance, the cozy financial climate made possible by the succession of low mortgage rates could lull would-be homebuyers (especially first-timers) into missing opportunities that might not be repeated.

The risk embodied by this particular normalcy bias comes into focus when you review just how infrequently the current rate environment develops. Quasi-governmental mortgage backer Freddie Mac publishes the benchmark PMMS (Primary Mortgage Market Survey) statistics. They show that the 30-year home loan interest rate over the past two years has averaged a benign 3.8%—ending with the most recent rate (last Thursday): an extraordinary 2.88%.

Based on the past two years’ experience alone, it might be tempting to stand by to wait for even lower rates. But that would be less reasonable if the Big Picture is taken into account. When you look at the entire history since Freddie started keeping track, you find that the average rate since 1971 is 7.4%—double what has seemed so normal recently. In contrast to the actual historical norm, the past two years’ “normal” averages amount to something like a continuous succession of 50% fire-sale discounts!

The psychologists frequently discuss “normalcy bias” with another phenomenon, “analysis paralysis.” Given 2020’s deluge of nearly overwhelming, never-before-seen events, the combination of the two could certainly make understandable holding off on any major initiative (like buying and selling a home). That’s understandable—even if once-in-a-lifetime opportunities present themselves. At any rate, it’s at least a serious thought on whether this fall could be a rare opportunity for your own Costa Mesa real estate initiative. If you’d like to discuss current possibilities, we hope you’ll 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



Posted by Matt Kanoudi on
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