San Diego Housing Weekly Real Estate Market News

Steady buyer demand coupled with scarce new listings pushed up price growth and pending sales.

Home buyers are going to see more competition than they might expect — not because there are a huge number of buyers to compete with, but because there aren’t many homes on the market to go around.

Home buyers are motivated and are keen to hit the market this spring, even through a period of change unlike any we have ever seen. Mortgage rates are not only high, but volatile, which makes it hard for a buyer to know what they can afford. While buyers are showing up, affordability challenges and limited options contribute to a frustrating experience.

Sellers, or the lack of, are the bigger factor in this cooling market.

New listings actually fell in April, a rarity for what is usually the busiest time of year for home shopping. High mortgage rates affect sellers, too, who have largely decided not to trade in their current mortgage for a new one with a much higher interest rate.

Homes priced correctly have a good chance to sell quickly, just not at the light speed that was common last year. The median time on market for homes that sell is 10 days. Sellers need to price right from the start and focus on online curb appeal if they want to sell quickly.

Looking ahead, mortgage rates will likely continue to have the biggest impact on market conditions. If mortgage rates fall, expect the market to heat up. If mortgage rates rise, or remain volatile, that will freeze buyer and seller activity.

April data indicate that housing has returned to a seller’s market. Buyers flock to open houses at this time of year in hopes of securing a home in time to move in by early summer, yet this year will see far fewer new listings than “normal”, too.

Many would-be sellers don’t want to let go of their homes, on which they’re paying about 3% in mortgage interest in many cases, when they’d have to pay 6% or more on a new 30-year loan.

Rates Tick Up Again

Today’s current average mortgage rate on a 30-year fixed mortgage is 7.17%, up 0.17% from the previous week.

Borrowers may be able to save on interest costs by going with a 15-year fixed mortgage, as they often have a lower rate than that of a 30-year, fixed-rate home loan. The average rate on a 15-year fixed mortgage is 6.43%. But keep in mind that you’ll have higher monthly payments since you’re paying off your loan in half the time (15 years versus 30 years).

This is the time to evaluate how long you will own your home. If you will be in a new home for less than 15 years, you can save money by purchasing a home in San Diego using a 15 year fixed or even an ARM.

Should You Choose an Adjustable Rate Mortgage

Many people thing an adjustable rate mortgage is a bad idea, mostly from the housing market crash of 2008. But, not all ARM mortgages are a bad idea. There are many factors to consider when comparing an ARM mortgage to a fixed mortgage.

The most common ARM options are a five-, seven-, and 10-year ARMs… The shorter the time frame you choose, the lower and more competitive the interest rate, so you want to choose wisely to maximize as much savings as you can without putting yourself at high risk

There are also various caps in place regarding how much ARM interest rates and the resulting monthly mortgage payments can increase, according to the Consumer Financial Protection Bureau (CFPB). The caps cover the initial rate hike once the introductory period ends, as well as subsequent rate adjustments, and adjustments over the lifetime of the loan.

Reposted information from Zillow & Forbes

Tristen Campanella is a San Diego Real Estate focused on the long term security of her clients. By taking a holistic approcach to real estate in San Diego, she guides her clients to make the best choices for her clients stable future.