Interest Rates Hit New Lows Not Seen in Over a Year
Source: Steven Thomas - Orange County Housing Report
The last several months have been huge for interest rates. Since November 2018, interest rates have dropped dramatically from 5% to 4.25%, a substantial difference that helps on the homebuyer affordability front. Today’s rate of 4.25% is the lowest since February 2018.
Several factors contribute to this rate drop: A slowing national and global economy, a substantial drop in the price of oil, a trade war with no end in sight, and plenty of stock market volatility. All these factors are reasons for investors to park their money in safer, long term investments like government bonds, which causes interest rates to fall. Last week, the Federal Reserve stated that they were done raising the short-term rate and will not alter them any further for the remainder of 2019.
These new low rates not seen for over a year are an excellent opportunity for buyers to cash in.
(The table below shows an example of how big of a difference a lower interest rate can make in home price affordability.)
In the local Orange County market, active inventory remains at record levels not seen since 2012, giving buyers plenty of options and choices heading into the busy spring season.
Buyer demand and pending sales are up as we head into that season, and days on market are beginning to decrease, meaning now is a better time than ever to catch that dream home before it's gone!