Los Angeles Mortgage Rates: 2015 Trends, Predictions and More
Those who are wise buy property when prices are stable and mortgage rates are at their lowest. That’s exactly what’s happening in the Los Angeles metropolitan area right now. Los Angeles mortgage rates are now quite encouraging for investors.
For those who ever dreamed of owning a home, this is one of the best times to buy in the Los Angeles area. This period is volatile right now because some experts believe the low rates will remain in the next few months, while another group of experts believes the trend will not last long. If the Los Angeles mortgage rate and forecasts are anything to go by, interesting times are ahead.
Los Angeles mortgage rates dropped at the start of 2015 contrary to some predictions. Let’s take a closer look at home loan rates in greater LA and California, Freddie Mac reported that the 30-year fixed mortgage rates dropped to 3.63 percent toward the end of January. This indicates a general decline of 0.20 percent compared to the previous month, and 0.90 percent compared to the same period last year.
To shed more light on this, a decrease in mortgage rate close to one percentage point lower at the beginning of 2015 when compared to the same period last year, is something to celebrate. Even more so, because major predictions indicated loan rates were going to see an upward trend this year, which painted a gloomy picture of LA for those who intended to invest.
Many people know the chief players in the industry, among them Freddie Mac’s chief economist, predicted the Los Angeles mortgage rates would spiral upward 2015. Well, they got it wrong, just as they did last year. Their predictions are nowhere close to reality. If there are some things that are difficult to predict, long-term mortgage rates are one of them so you can go slowly on them.
What may cause Los Angeles mortgage rates to move upward is when the Federal Reserve adjusts the federal funds rates upward; that’s the time anyone can start to worry. Federal funds rates regulate inter-bank borrowing. The rates have been stable and low for years to boost economic growth. But there are indications the rates may go up sometime later this year, most likely toward the second quarter of the year. In case this happens, the Los Angeles mortgage rates will definitely go up even though there’s no telling at what rate.
For home owners and home buyers in Los Angeles, the important message here is that the Los Angeles mortgage rates are at their lowest now. The last time it ever hit this low was sometime in November 2012. During this time, the 30-year average went down to 3.31 percent. If you ever wanted to shop for a mortgage, this is the right time.
It’s also worth noting you can use the Los Angeles mortgage rate trends and averages to comparison shop. However, know there are many other factors that can affect rates in different places, so use the Los Angeles mortgage rates with caution. Remember that a good credit score earns a lower mortgage rate, and borrowers with bad credit scores are given higher rates. You also need to find out what lenders charge for different loans, so you can choose the best one for you. Also, the size of your down payment plays a role.
There is also the issue of home prices to consider. Many home buyers in Los Angeles are only concerned with mortgage rates. They forget that home prices are also equally important. Look at the home prices at the beginning of the year, and it appears that the news is also good here and even better than the recent past.
The home prices in Los Angeles shot up between 2012 and 2014, while the mortgage rates were basically predictable. In the Los Angeles area, the annual home price gain was highest compared to more than 100 metro areas in the U.S. The period between July 2012 and July 2013 saw the prices rise by a whopping 22.6 percent. However, this growth rate seems to have slowed considerably is expected to stay this way for the rest of this year.
Using Zillow’s estimate pricing formulas, the rise of home prices in LA was about 8 percent in 2014, but it’s forecasting a rise of 2.6 percent as we move to the end of 2015. Let’s take a closer look at this forecast with a proper perspective.
Home loan rates have trended downward in the past few weeks, and we only hope they will fall further. However, this downward trend is not likely to persist for long; it may not make it to the end of the year. Remember, predictions by all major real estate analysts indicate the year will remain generally volatile.
However, there’s no need to panic. This is because, even if the Los Angeles mortgage rates are going to rise later in the year as some predict, it won’t happen overnight. This gives potential home buyers enough time to plan. Furthermore, the biggest rise we’re likely to see is one percentage point. Nevertheless, it’s best to start now when the rates are at their lowest.
If you’re in the market, keep a close eye on home prices and Los Angeles mortgage rates to find the best deal for you. You can also leave a comment below if you have questions or concerns. I’m happy to speak with you too.