Mortgage rates have continued their downward spiral much to the delight of home buyers ready to take advantage of such low rates. According to Freddie Mac, lenders are offering an average of 3.87 percent on a 30-year fixed-rate mortgage. Many experts predicted that falling mortgage rates would recover in late 2014 and early 2015, rising to 5 percent possibly.
However, all bets are off when it comes to mortgage rates. Experts are pleasantly baffled by the phenomenon while home buyers are scrambling to find that perfect home on the market to take advantage of the low rates. The Mortgage Bankers Association reports applications for home loans jumped an astonishing 49 percent for the week that ended January 9. This is the largest increase the association has seen since 2008.
A lot of people who refinanced in the past year are calling again,” said Richard T. Cirelli, head of RTC Mortgage Corp. to the Los Angeles Times. “So far it looks like a very good year for people refinancing, as well as people that are buying.”
This recent surge comes hot on the tails of the week before when purchase applications rose 24 percent and refinances saw a 66 percent increase. One of the main factors behind the falling mortgage rates are weaker global economies, which are prompting foreign investors to place their money in a much safer, stable U.S. market. This is causing a downward pressure on mortgage rates that could possibly remain for the foreseeable future.
Santa Barbara Real Estate Primed for Home Buyers
In Santa Barbara, low mortgage rates are being coupled with falling home prices, marking a great time for luxury home buyers who want to finance. Altos Research, a California-based real estate analytics company, reports a median single-family home value of $1,671,577. This is a significant downgrade from April 2014, when the median home value topped out for the year around $2.7 million.
Despite the falling home prices, Santa Barbara is experiencing rather balanced conditions. Altos measures buyer and seller favor through its unique value, the Market Action Index, which uses a scale with 30 as its neutral value. Santa Barbara’s current MAI is just below neutral at 29.83. While values below 30 typically indicate a buyer favor, this MAI is so close to the neutral zone that conditions are showing a healthy balance.
Perhaps the one factor that may work against home buyers in the Santa Barbara market is the falling amount of homes that are available. Altos reports inventory is on a downward trend with a current value of about 318 properties on the market as of January 16.
Properties are also moving just a little bit slower, which is expected around this time of year. Altos reports the average property has been on the market for about 168 days, which is not at all uncommon for luxury markets.
If you are interested in luxury homes in Santa Barbara, please don’t hesitate to give us a call. We’d love to help you take advantage of a great buyers market and find the perfect home.