June home sales drop nationally, rise for California
■ By Matt McPherson / Columnist
Last week the Federal Reserve (Fed) held a meeting to determine whether to change the rates. The balance sheet remained untampered with and the federal funds rate was not increased. The Fed issued a statement in which they stated the balance sheet would begin to taper “relatively soon,” which many markets interpret as September. This “tapering” directly influences mortgage rates, considering they are the biggest buyer of mortgages in the market.
After weighing all the factors and calculating in home values and home sales, speculation suggests higher rates toward the end of 2017. The second quarter numbers for the GDP came in at 2.6 percent, which is an increase from the first quarter. Many lenders and investors are keeping their fingers crossed in hopes that the second quarter rates will hold up. As a result of all the recent information, mortgage rates slightly increased this last week.
Nationally, June saw a decrease of 1.8 percent in existing home sales, although they remain up over the last year. In the state of California, an increase of 2.4 percent from last year at this time indicated further increases through the new year. A drop in inventory of 0.5 percent nationally proportionally affected the median home price, which increased 6.5 percent since last summer.
Inventory of new homes is on the rise and new home sales were up in June as expected. Many of the new home sale calculations are based on executed contracts (pending escrows) and not actual sales. Experts anticipate the numbers may go up by fall, considering they measure pending sales rather than closed sales. The sale of new homes is gradually strengthening, up 9.1 percent from last year at this time.
The regulator for Fannie Mae and Freddie Mac, the Federal Housing Finance Agency, recently published their House Price Index for the month of May. Single family homes with conforming loan amounts are measured by this index. Since last year the index is strengthening with a price appreciation of 6.9 percent, which is up slighty from last month’s of 6.8 percent.
Larry Iest of MegaStar Financial Corp. provided the current interest rates for conventional and FHA loan amounts. These are average rates for a client with good credit and no points with a $200,000 purchase price and 20 percent down.
Interest rates for the week:
Conventional rates: 30-year fixed, low 4 percent range; 15-year fixed, mid 3 percent range.
FHA/VA 30-year: low 4 percent range.
Matt McPherson is a licensed real estate agent with Coldwell Banker Associated Brokers, BRE # 01362837. Reach him at 951-315-7914 or McPhtown@aol.com