Economy & Mortgage News.U.S. economy continues to show resilience, with the most recent report showing a growth of 4.9% in the Q3. California alone continues to thrive, adding 9,000 net new jobs in September across tourism, restaurants, entertainment, and healthcare according to C.A.R. research, although unemployment rose to 4.7%. Meanwhile, the Federal Reserve has said it is planning on keeping the higher interest rates for longer than originally anticipated in its continued fight against inflation, which suggests mortgage rates will also stay elevated through the end of the year. Mortgage rates have continued to climb, topping 8% several times during the past weeks. Currently a conforming 30-year fixed rate is pricing around 7.750%, while a Jumbo 30-Yr fixed loan is pricing out at 7.375%. Along housing starts, there has been some hope on fighting the housing shortage with new residential housing rising to 1.4MM units last month, mostly concentrated in multi-family buildings and not single family homes. In California, while home prices had a slight decline in August, the median price of a single family home rose for its 3rd consecutive month on a year to year basis, according to C.A.R. research. Thus, we don’t see prices dropping drastically, unless it’s a saturated market area. Many people asks us about home prices as many have been waiting for prices to go down given the high interest rates. But simply put by CalMatters.org: “the high borrowing rates not only cool demand, putting downward pressure on prices, they simultaneously restrict supply, which boosts prices back up”. For now, we foresee a continued steadiness in prices across most markets, so best to work with buyers and sellers and create concessions that will make both sides happy.
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