California Spring Home Buying Season 2014
There is a lot of good news for home buyers as we enter the Spring home buying season.
Interest rates have recovered from the first of the year. Historically interest rates rise at the beginning of every new year and then settle down about 6 weeks later. 2014 was not different as home buyers watched interest rates drop almost 1/2% from January to February. While rates are still almost 1% higher than this time last year, they have remained in the 4%’s since last June.
The inventory of available homes for sale is increasing. Home owners have seen nice increases in home equity over the last 2 years and many can now make that move they have been putting off. California in general has risen 1 full month since February, 2013. In February, 2014 California saw a 4.7 months supply of available homes. Some very popular areas are still struggling but the trends seem positive.
Lenders are again offering a mixed bag of financing options. During 2011-2013 just about every lender was offering only 30 year fixed mortgages as the safest instrument available. We are now seeing lenders offering adjustable rate mortgages with attractive rates. Adjustable rate mortgage can be very attractive if you know you will be moving within the locked rate period. Many first time buyers typically live in their first home 5-8 years. For these buyers an adjustable rate mortgage with a lock period of 5-7 years can be a nice option. Be sure to check with your lender for all of the disclosures associated with these mortgages.
The California Spring Home Buying Season in 2014 looks brighter for home buyers.