As of today, July 13th the average interest rates nationally on 30-year fixed mortgages is under 7.0%, down 14 basis points from last week. By the end of 2024 rates are projected to be in the mid 6’s, but for people with good credit scores we are already almost there. Yesterday a local mortgage broker was quoting 6.625% on conventional loans and 6.75% on jumbo loans. These are the kinds of numbers that are going to bring more buyers to the table and get them motivated.
Buyers who were looking when the mortgages were in the mid to high 7’s now have significantly more buying power. Buyers who couldn’t qualify for loans before are now going to be back in the market. With the expected increase in demand, we should also anticipate higher prices driven by more multiple offer situations. Mortgage brokers are going to start getting busier, not only with new purchase deals but with refinancing. Or maybe homeowners who locked in higher rates will wait a little while longer to see if rates come down further? That’s probably the best move in a rapidly improving market.
Our lower interest rates are caused by the air coming out of the inflation balloon. While we are not at the stated inflation goal of 2% yet, the Fed has been signaling they won’t wait until inflation is that far down to start lowering the Federal funds lending rate, which currently sits at the lofty heights between 5.25-5.5%. If they wait that long, they risk inflation going too low, their delayed action leading to a recession. This is good news for the real estate and stock markets, plus the economy in general.
Surfing Sidebar (sandbar?) ...
Yesterday I was surfing at Stinson Beach with a friend. This is the sharky time of year, and there has been a lot of activity down in Santa Cruz and Monterey Bay lately. We weren’t surfing very far off shore, and there were a number of swimmers up and down the beach but very few surfers. While we were sitting a little further out than the swimmers, there was still a measure of comfort with so many humans in the water. The odds are better that way.
Then out of nowhere a pack of 8 harbor seals appeared to my side, all looking at me. In 40+ years of surfing, that’s something I’ve never seen. Usually you see a seal here or there, but not clustered together. It was a little spooky but we kept surfing. This morning, I asked Siri why seals swim together, and the answer was quite disconcerting. They do it to avoid predators.
As most Marin residents know, Stinson Beach has had a few shark attacks and several sightings over the years. There are shark warnings posted on the beach. Just this last October a swimmer went missing nearby off Wildcat Beach in Point Reyes. Witnesses say he was attacked by a shark, and his body was not recovered. There have been 24 shark attacks of the CA coast since 2020. I might be done surfing Stinson for a while, or at least until the wave quality gets better in the fall.