Oct. 2, 2018
Should you still buy a home in Pleasant Hill even when mortgage rates have been trending up consistently since July of 2016, and the local Pleasant Hill market has changed significantly in recent months?
In fact... Mortgage interest rates, as reported by Freddie Mac, have increased by close to a quarter of a percent over the last several weeks.
The FED is expected to raise rates at least once more in Q4 for 2018.
The ten year note continues to hang around the highest point since 2013
TEN YEAR NOTE LAST FIVE YEARS
Freddie Mac, Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors are all calling for mortgage rates to rise another quarter of a percent by next year.
In addition to the predictions from the four major reporting agencies mentioned above, the Federal Open Market Committee recently voted “unanimously to approve a .25 percentage point increase in the primary credit rate to 2.75 percent.”
Historically, an increase in the primary credit rate has translated to an overall jump in mortgage interest rates as well.
This has caused some purchasers to lament the fact that they may no longer be able to get a rate below 4%.
However, we must realize that current rates are still at historic lows.
Here is a chart showing the average mortgage interest rate over the last several decades:
Could you imagine if you had bought in the 1980s at today's prices?!?
That would be quite a payment!
HOME SALES TRENDS HAVE CHANGED IN LOCAL MARKETS
In the four weeks ending on September 23, 22.9 percent of homes sold for more than their asking price, across the metros tracks. More than one-in-five sounds like a lot, but it represents a 2.6 percentage point decline compared to the same period last year when 25.5 percent of homes sold above their list price.
The share of homes that sold above list hasn’t been this low since 2016 and has been declining since its peak of 29 percent in June.
In fact in the Bay Area alone home sales tanked almost 10 percent last month according to CNBC.
Total home sales for the Bay Area fell nearly 10 percent compared with August 2017, according to CoreLogic.
Sales increased 1.8 percent compared with July, but the total volume was nearly 18 percent below the August average going back to 1988 and the lowest since August 2011.
Sales activity for the summer, June through August, was the slowest in seven years.
SHOULD I STILL BUY A HOUSE IN PLEASANT HILL?
Though you may have missed the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago,
A lower rate than your parents did twenty years ago...
...and a better rate than your grandparents did forty years ago.
That being said it does not necessarily mean that you should buy your home right now!
Depending on your situation you may NOT be in the best position to buy.
I'm committed to giving you good honest Real Estate advise here on this blog...
Here's what I REALLY think about if NOW is a good time to buy in the bay area for 2018...