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Mortgage rates hit lowest level in two months.

lowerinterestratesThe decline in rates is directly related to the Fed’s decision last week to postpone the start of the massive monetary stimulus. In other words, the feared “Tapering” will not start anytime soon. The reason for their decision is based on the fact that they would like to see more evidence of solid economic growth. Once again, a negative (slow economic growth) turns into a positive for potential home buyers (slower raising mortgage rates). In late 2008, the Federal Reserve lowered the overnight interest rates to near zero and with last week’s decision, it is expected that this rate will stay near zero until January 2015.
This however, does not mean that Mortgage Rates will not go up over the next 18 months. They will, but more gently than what we saw in the last 2 months. Today, 30-year fixed-rate mortgages average at 4.32% which is down from 4.50% a week ago.
Home prices have also settled at a more modest and sustainable increase level. This can be attributed to an increase of inventory because more homes have now equity in them and people now decide to either trade up (younger growing families) or it is time to trade down (empty nesters and retirees). Home builders have also recovered and have started new developments like the 690 Acres Village of Sendero in San Juan Capistrano.
All of these recent trends make for a great real estate market, regardless of the fact whether you are a seller or a buyer. Contact me directly at (949) 212-0471 or if you would like to receive some further insights into the real estate market in Southern Orange County.

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