Home Loan Shoppers May be Surprised to Know
It may have seemed as if the springtime rise in the rates Costa Mesa home loan originators were quoting was overdue for a pause, and that's what local applicants found last week. The rate dips weren't gigantic, but they pointed in the right direction. Over the weekend, Yahoo! finance's "Moneywise" column was able to headline, "Homeownership just got 5% cheaper as mortgage rates fall off a cliff."
To applicants whose recent memories include interest rates that began with a "3," that cliff may seem to be a low one—but the NARs' senior economist was correct in asserting that purchasing a home was 5% more affordable at week's end than at its beginning. At week's end, Freddie Mac's calculation for the average 30-year mortgage rate was 5.3%—down from 5.7%. Another ray of sunlight was the slight loosening of what has been a painfully sparse supply of U.S. homes for sale.
For soon-to-be home loan applicants combing the Costa Mesa listings to work out what their monthly loan payments would amount to, any retreat was good news. Even more so was the current situation as viewed by those with a broader perspective, especially in light of one often-overlooked historical fact: today's home loan deals remain atypically advantageous.
That statement is visually presented in a chart displaying Freddie Mac's official historical data. The simple line graph begins at 1971 and shows a more or less steady rise from above 7% to the infamous heights of 1983, which peaked at an unsustainable 18+%—the crushing record. From there began a decade-long rate drop until it touched the overall average rate—which is what today's buyers (especially younger ones) may find eye-opening.
It hovers over the dotted horizontal line depicting the 50-year average—a label that reads,
"Average since 1971: 7.77%."
Freddie Mac isn't prone to dramatics, so there's no "!" after the label—but it deserves one. Put another way, last week's national average home loan rates were a full 2% below what the average American homebuyer has signed up for through the years. It's no exaggeration to say that today's qualified buyers are being offered historically advantageous borrowing propositions. It might partially explain why some observers won't be surprised if the market begins an uptick before the year ends—especially if the rates hold.
Do give us a call if you are contemplating taking advantage of the Costa Mesa market this summer.
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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