What’s going on? Mortgage rates rise slightly; housing prices have modest gains
Long-term mortgage rates rose for a second straight week as the average 30-year fixed mortgage rate increased to 3.91%, from 3.85% a week ago.
Mortgage buyer Freddie Mac says the 15-year mortgage term, frequently used by homeowners when refinancing their mortgages, also ticked up from 3.15% to 3.21%.
The California Association of Realtors predict the median price of an existing house in California will increase 4.2% to $561,000 next year, compared with a projected increase of 7% in 2017.
What does this mean? Home affordability is decreasing
Back in 2012, about half of Californians could afford the median-priced home. Whereas next year, it’s projected that just 26% of Californians will be able to afford the median-priced home.
“The low end is kind of disappearing,” says the California Association of Realtors Chief Economist Leslie Appleton-Young. “It pushes people inland. It pushes people out of state.”
Why should you care? Now could be the time to buy in CA
With home prices holding steady and rates still low, this could be the time to make your real estate move in California.
Curious to see what you can afford? Check out our Home Affordability Calculator.