While low interest rates and depressed home prices have started to attract entry-level home buyers, the typical home in San Diego County remains out of reach for the average family.
MAKING SENSE OF THE STORY FOR CONSUMERS
· Bleak economic news is usually followed by a downward turn in mortgage interest rates, but despite some fairly poor news this week about banks selling securitized loans at fire sale prices, the overall average of 30-year fixed-rate mortgages eased by just two basis points (.02 percent). The fact that news that would usually produce a significant decline in mortgage rates instead preceded only a modest drop could be a sign that rates may soon go up. Consumers should take advantage of low interest rates while they last.
· According to home-finance corporation Freddie Mac, U.S. house prices have climbed 6.2 percent a year over the past 30 years.
· The recently passed economic stimulus package raised the conforming loan limit to up to $729,750 in some areas. So-called "expanded conforming" loans should provide some borrowers with an opportunity to finance or refinance at lower rates than the jumbo market may currently offer, provided borrowers can meet the guidelines for a conforming loan, which are usually more restrictive than jumbo market underwriting criteria.
Extracted from CAR Market Matters