30 Year Fixed Rate Loan at Cost of One Point: 4.625%*
Rates jumped yesterday based on rumors that the Fed may allow yields to creep up somewhat in order to entice the private sector into buying mortgage backed securities. As you all know, the primary buyer for the last six months has been the Fed. Without the Fed’s massive purchases, interest rates would be substantially higher – probably in the mid 6’s or higher where they were last year.
Also, as most of you know, there is a feeding frenzy right now at the lower end of the market. Many of our home-buying clients are losing out in multiple bid situations where there are as many as 30 offers on one property. It seems like 2005 all over again, which is a surprise given the dire predictions from a year ago in regard to these “hardest hit” areas.
More interesting is the fact that the Median Home Price from March to April actually INCREASED for most of the counties in the Bay Area. This is the first month-to-month increase since October of 2007. It looks like the Foreclosure Moratorium was effective in stabilizing the market – a government policy that actually worked J?
Now it remains to be seen what the next wave of foreclosures will do to the market this summer now that the Foreclosure Moratorium has been lifted
*The above rate quote has the following assumptions: $400,000 Loan Amount; 20% down payment; credit score above 740; property is SFR; borrower has sufficient income to qualify; APR is approximately 0.20% higher than quoted rate for a $400,000 loan. Estimated closing costs affecting the APR include $4,595 for Origination and Processing Fees, $850 for other Lender Fees; $1,400 for Escrow Fees, and $1,000 for Prepaid Interest.
Call Jay Voorhees or Heejin Kim at (925) 855-4491
Real Estate Broker, CA Dept of Real Estate, DRE# 01524255, NMLS# 335646