Mortgage Rates Hit 13 Month Low: Buyer’s Market Strong Throughout Southern California
Mortgage rates are continuing to move in the right direction for home buyers, with rates hitting a 13-month low this week. Declining mortgage rates combined with home prices falling throughout Southern California are expected to give buyers one of the best opportunities to buy a home in quite some time. This spring is shaping up to be a buyers’ market, as mortgage rates are expected to stay low at least through summer.
Rate expected to stabilize throughout the first half of 2019
Last week, the Federal Reserve’s policymaking Federal Open Market Committee left interest rates unchanged and hinted that there would be no further rates hikes in 2019. This comes after many speculated that rate hikes would be coming because the Fed indicated back in December 2018 that two rates hikes would be appropriate in 2019.
But with the Feds latest actions, it looks like a rate hike in the near future is unlikely, unless economic conditions significantly change. In a statement following the FOMC meeting, Fed Chairman Jerome Powell indicated that the Fed would remain “patient” before increasing rates.
“The reason we’re on hold is that we think our policy is in a good place, and the economy’s in a good place, and we’re watching carefully,” said Fed Chairman Powell in a press conference. “It’s a great time for us to be patient and watch and wait and see how things evolve.”
After the Feds announcement, the average rate on a 30-year fixed mortgage fell from 4.40% to 4.34% according to Mortgage News Daily.
Are we seeing a Buyer’s Market?
According to the Los Angeles Times, Southern California’s housing market took a hit in January, with sales dropping 17% from a year earlier. In Los Angeles, almost 28% more homes were on the market, and almost 16.5% of those listings had at least one price cut, according to Zillow. As these homes sit unsold, we should start seeing lower prices throughout Southern California.
This is all great news for home buyers, who should see these historic low rates hold at least throughout the spring and into summer. If you are in the market for a new home or want to find out what this all means for the housing market in Southern California, please feel free to reach out and give me a call or shoot me an email.
Michael R. Sternquist