California Home Prices Skyrocket While National Loan Refinancings Heat Up

With the lowest mortgage rates in decades making the news, the Mortgage Bankers Association reported that applicants for home loans rose last week by nearly 7% from a week earlier. Home loan refinancing applications rose 9.2% to see their highest levels since May 2009, doubtless due to the lowest 30-year fixed rate seen since Freddie Mac began keeping records in 1971.

Now is an excellent time to refinance your home loan to reduce the interest rate and monthly payments and/or replace an adjustable rate mortgage with a fixed rate home loan. While refinancing drove total U.S. mortgage applications to its nine-month high, demand for loans to purchase homes sunk to a near 13-year low.

Refinancing applications made up 79% of the loan application totals, the Mortgage Bankers Association reported. Its survey of mortgage loans covers more than 50 percent of all applications nationwide.

The borrowing rate for mortgage loans is just a tad above the record low of 4.61 percent set in March 2009, according to the MBA’s records. Fifteen-year mortgage rates rose to a 4.11% nationwide average last week from 4.06% the week earlier. Following the national trends, California mortgage rates are near record lows, as well.

California home prices are skyrocketing upwards due to these developments, soaring in some of the largest metro areas by 30% to 50% over last year. Home prices in Monterey are up 50%, San Francisco Bay Area median prices are 48% higher, Santa Clara County (Silicon Valley ) home prices are up 41% and Sacramento has seen home prices rise 14% percent since the lows a year ago.