Mortgage interest rates are still at historical lows. That said, according
to Zillow.com, California mortgage rates (as of May 15) have increased 19 basis points just since
last week.1 While it may not
sound like much, it could be an indicator that market conditions are beginning
to shift. Anyone who has been sitting on the real estate sidelines waiting for
the “perfect” time to buy may miss that opportunity if they wait much longer.
WHAT’S A BASIS POINT? AND WHY SHOULD I CARE?
A basis point is equal to 1/100th of 1%. In terms
of interest rates, when you apply even a small increase over thousands of
dollars in a typical mortgage, the net effect can mean a significant bump in
the monthly payment of principal and interest, and a higher cost for the loan
over time. Unless you enjoy paying more for things, you should pay close
attention to basis point activity.
Take a look at the chart on the right, created by the
California Association of Realtors, and you’ll see a great example of what
happens when an interest rate jumps by 50 basis points, or ½ percentage
intervals.
WHAT’S HAPPENING WITH PRICES?
In Yorba Linda, Zillow.com reports that home prices are up
over 15% compared to the same period in 2012. Furthermore, the city’s 2013
sales volume increase is nearly a full percentage point higher than Orange
County as a whole2; Yorba Linda homes are in high demand! Of course,
if you read last
week’s blog, you already know some of the reasons why.
Even more telling of a possible market shift is DataQuick’s
report that Southern California median home prices in April nearly reached a
5-year high.3
MAYBE I’D BETTER GET MOVING!
If you think it’s time to get moving before rates and prices
move any higher, you may be right. Give me a call if you’re ready to start
looking for your next home in Yorba Linda. I’ve lived in this wonderful
community for over 15 years and would love to help you find your home here,
too!
Nanette Shapiro
(714) 924-0781
nanette.shapiro4@gmail.com
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