As Costa Mesa residents strive to resume life and career in anything like their pre-pandemic forms, one phrase that used to appear a lot less frequently keeps popping up: “the new normal.

The American Enterprise Institute just invoked that phrase in a report that has implications for area house hunters and home sellers alike. The report from the AEI Housing Center takes a unique look at a home finance statistic they believe is a valid indicator for the direction of residential real estate activity as a whole: rate lock data.

Since mortgage interest rates can rise and fall from day to day, future Costa Mesa home buyers often secure “rate locks” from home loan providers. Locks guarantee that, when a mortgage is issued, its interest rate won’t exceed a guaranteed amount. When rates are low—as has definitely been the case recently—a lock assures the buyer that a favorable monthly payment amount won’t have risen by the time their purchase is finalized at the signing table.

How rate lock activity might affect Costa Mesa home buyers and sellers comes through its connection with the tenor of the current market. For anyone who monitors the popular media, late-July reports largely focused on a purported loss of momentum. Typical was Friday’s lead CNBC story, “Pending home sales drop in June—more evidence of a housing turnaround.”

Although house hunters may be primarily focused on seeking a property that fits their needs, nonetheless, stories like CNBC’s can affect their expectations (and bargaining flexibility, if and when negotiations proceed). Those expectations might waver if they read AEI’s report, “Housing Finance: Insights on the New Normal,” which draws a contrary conclusion after analyzing the July 17 – July 23 data. Although they do acknowledge housing purchase volume was 21% below 2020 levels, the purchase rate lock volume “portrays a different story”—especially considering that the 2020 purchase results reflect pandemic distortions. AEI points out that a more meaningful comparison is with 2019—which put home purchases at 19% below this year’s. Furthermore, the purchase lock volume numbers portray an even more positive “different story.” They show a volume increase of 32% over 2019—and even a 16% increase above 2020.

The AEI authors contend that, ever since the pandemic began undermining the reliability of home purchase predictions, rate lock numbers have shown themselves to be better indicators of future sales. For Costa Mesa home sellers who might have been deterred by forecasts of rising prices and discouraged buyers, the prediction of steady home purchase growth paints a distinctly brighter picture.

No matter what the future state of affairs turns out to be, it’s reasonable to say that your own personal “new normal” would best be based on what is available in the here-and-now. Call us when it’s time to get started on your next Costa Mesa real estate initiative.

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





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