Mortgage rates hit two-month low: Sacramento housing market update
Mortgage rates are the lowest they’ve been since early February. Will that give the Sacramento housing market a burst of energy?
Updated: 7:29 AM PDT Apr 5, 2023
Lauren Williamson is the Financial and Home Services Editor for the Hearst E-Commerce team. She previously served as Senior Editor at Chicago magazine, where she led coverage of real estate and business, and before that reported on regulatory law and financial reform for a magazine geared toward in-house attorneys. You can reach her at [email protected] Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.The average for a 30-year fixed-rate mortgage fell to 6.37% on April 4, the lowest it’s been since February 3, according to Mortgage News Daily. While the spring buying season has kicked off with a whimper in Sacramento, the drop in mortgage rates could help animate potential homebuyers.The average rate on a 15-year mortgage is 5.8%, while 30-year jumbo mortgage rates and 5/1 ARM rates sit at 5.96% and 6.60%, respectively.PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSIyNDgxNTAwZi0zZDMxLTQ0MzYtYjZlYy1lYmFlZDk3Y2NkN2IiIGRhdGEtY2FtcGFpZ249ImhlYXJzdHR2LW10Z3B1cmNoLW11bHRpIiBkYXRhLXN1Yi1pZD0iaHR0cDovL3d3dy5rY3JhLmNvbS9hcnRpY2xlL3NhY3JhbWVudG8taG91c2luZy1tYXJrZXQtbW9ydGdhZ2UtcmF0ZXMtdHdvLW1vbnRoLWxvdy80MzUxMTc4OCAiPjwvZGl2Pgo=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Mortgage rate trendsMortgage rates rose precipitously between early February and the second week of March as key indicators suggested that the Federal Reserve had more work to do in its fight against inflation. However, the failure of Silicon Valley Bank and others in subsequent days destabilized the economy enough that some wondered whether the Fed would raise the federal funds rate at all during its March 22 meeting. The Fed doesn’t set mortgage rates, but its actions influence them, and the more hawkish it is on inflation, the higher mortgage rates tend to go.The Fed ended up raising the target federal funds rate by another 0.25%, bringing it to 4.75%-5%. Fed Chair Jerome Powell indicated during a private meeting with Republican congressmen last week that the Fed will impose one more rate hike in 2023, bringing the benchmark borrowing rate to 5.1%. As a result of the economic turbulence, mortgage rates have been volatile during the first two months of 2023. After rates for 30-year fixed-rate mortgages topped out at 7.24% in November, they fell steadily until early February, when pessimistic inflation data caused a rebound. However, personal consumption expenditures for February rose less than expected, according to data released March 31. That could be an indication that inflation is starting to cool. Sacramento housing market trendsThe once-scorching Sacramento housing market has continued to see some of the biggest declines in the U.S. in recent weeks. Pending home sales dropped 48.6% in Sacramento during the four-week period ending March 26 compared to the same time last year, the second largest decline in the nation, according to Redfin’s weekly housing market report. The median sale price in February was $468,000, a 4.5% decline over 2022, Redfin said. More recent data that accounts for the four weeks prior to March 26 saw the median sale price drop 11.4% over the same period last year, the biggest annual decline for Sacramento since 2015. Real estate experts say that any decline in mortgage rates breathes life into the housing market. And if there’s a sustained drop, it could inject some energy into the Sacramento housing market just as the spring buying season kicks off. However, there’s another factor complicating matters for potential homebuyers: The Fed indicated credit will begin to tighten, which would make it harder over the coming months to get a mortgage. That means potential homebuyers could have a window of opportunity right now to lock in a lower rate or refinance a mortgage that they took out between October and November, when rates were at their highest. (In most cases, a refinance makes the most sense when rates have dropped 0.75% or more. Rates this fall peaked at 7.24% — 0.87 percentage points higher than they are now.) Comparing rates between multiple lenders will help you find the best loan for your situation. PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSI1NjZkNGU5OC0yMWM1LTRmMjAtOTMyMS01OGZmNmE4MTZiNWYiIGRhdGEtY2FtcGFpZ249ImhlYXJzdHR2LW10Z3JlZmktbXVsdGkiIGRhdGEtc3ViLWlkPSJodHRwOi8vd3d3LmtjcmEuY29tL2FydGljbGUvc2FjcmFtZW50by1ob3VzaW5nLW1hcmtldC1tb3J0Z2FnZS1yYXRlcy10d28tbW9udGgtbG93LzQzNTExNzg4ICI+PC9kaXY+Cg==30-year fixed mortgage interest ratesOn average, the interest rate for a 30-year mortgage on April 4 is 6.37%, down from 6.60% on March 28. 15-year fixed mortgage interest ratesOn average, the interest rate for a 15-year mortgage on April 4 is 5.81%, down from 6.00% on March 28. Jumbo mortgage interest ratesOn average, the interest rate for a 30-year fixed rate jumbo mortgage on April 4 is 5.96%, up slightly from 5.95% on March 28. 5/1 adjustable-rate mortgagesOn average, the interest rate for a 5/1 ARM on April 4 is 6.60%, the same as it was on March 28.(All rates are according to Mortgage News Daily.)What determines mortgage rates?Mortgage rates are influenced by a variety of factors, including:Your credit scoreDown paymentYour debt-to-income ratio (DTI)The type of loan you’re gettingLoan termInterest rate type (fixed vs. adjustable)Inflation and the overall economyThe Federal Reserve (which doesn’t set mortgage rates, but it certainly influences them)Should you refinance your mortgage?With mortgage rates dropping, a mortgage refinance could potentially save you money both on your monthly payments as well as the entire life of your loan. Here are a few factors to consider:Cost: If you refinance your mortgage, you must pay closing costs just like you did when you took out the loan in the first place. The average closing costs come to around $5,000 on a refinance, according to Freddie Mac. Other costs can include mortgage origination fees, appraisal fees, title fees and more. All told, the cost of refinancing a mortgage typically totals 2%-5% of the principal. If the closing costs outpace how much you’d save by refinancing, then it doesn’t make sense to alter your mortgage.How long you plan to stay in your home: You want to make sure you plan to stay in your home long enough to recoup the closing costs and other fees associated with refinancing your mortgage. For example, if it costs $4,000 to refinance your mortgage but you lower your monthly payment by $200, it will take you 20 months, or a little less than two years, to break even.Refinance rates: In most cases, it makes sense to refinance if mortgage rates drop more than three-quarters of a percentage point. The rate for a 30-year fixed-rate mortgage peaked this fall at 7.24%, so if you took out a mortgage between October and November, it could make sense to refinance now.PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSIyNDgxNTAwZi0zZDMxLTQ0MzYtYjZlYy1lYmFlZDk3Y2NkN2IiIGRhdGEtY2FtcGFpZ249ImhlYXJzdHR2LW10Z3B1cmNoLW11bHRpIiBkYXRhLXN1Yi1pZD0iaHR0cDovL3d3dy5rY3JhLmNvbS9hcnRpY2xlL3NhY3JhbWVudG8taG91c2luZy1tYXJrZXQtbW9ydGdhZ2UtcmF0ZXMtdHdvLW1vbnRoLWxvdy80MzUxMTc4OCAiPjwvZGl2Pgo=Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was originally published on SFGate.com and reviewed by Jill Slattery, who serves as VP of Content for the Hearst E-Commerce team. Email her at [email protected].
Lauren Williamson is the Financial and Home Services Editor for the Hearst E-Commerce team. She previously served as Senior Editor at Chicago magazine, where she led coverage of real estate and business, and before that reported on regulatory law and financial reform for a magazine geared toward in-house attorneys. You can reach her at [email protected] Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.
Mobile app users, click here for the best viewing experience.The average for a 30-year fixed-rate mortgage fell to 6.37% on April 4, the lowest it’s been since February 3, according to Mortgage News Daily. While the spring buying season has kicked off with a whimper in Sacramento, the drop in mortgage rates could help animate potential homebuyers.The average rate on a 15-year mortgage is 5.8%, while 30-year jumbo mortgage rates and 5/1 ARM rates sit at 5.96% and 6.60%, respectively.
Mortgage rate trendsMortgage rates rose precipitously between early February and the second week of March as key indicators suggested that the Federal Reserve had more work to do in its fight against inflation. However, the failure of Silicon Valley Bank and others in subsequent days destabilized the economy enough that some wondered whether the Fed would raise the federal funds rate at all during its March 22 meeting. The Fed doesn’t set mortgage rates, but its actions influence them, and the more hawkish it is on inflation, the higher mortgage rates tend to go.The Fed ended up raising the target federal funds rate by another 0.25%, bringing it to 4.75%-5%. Fed Chair Jerome Powell indicated during a private meeting with Republican congressmen last week that the Fed will impose one more rate hike in 2023, bringing the benchmark borrowing rate to 5.1%. As a result of the economic turbulence, mortgage rates have been volatile during the first two months of 2023. After rates for 30-year fixed-rate mortgages topped out at 7.24% in November, they fell steadily until early February, when pessimistic inflation data caused a rebound. However, personal consumption expenditures for February rose less than expected, according to data released March 31. That could be an indication that inflation is starting to cool. Sacramento housing market trendsThe once-scorching Sacramento housing market has continued to see some of the biggest declines in the U.S. in recent weeks. Pending home sales dropped 48.6% in Sacramento during the four-week period ending March 26 compared to the same time last year, the second largest decline in the nation, according to Redfin’s weekly housing market report. The median sale price in February was $468,000, a 4.5% decline over 2022, Redfin said. More recent data that accounts for the four weeks prior to March 26 saw the median sale price drop 11.4% over the same period last year, the biggest annual decline for Sacramento since 2015. Real estate experts say that any decline in mortgage rates breathes life into the housing market. And if there’s a sustained drop, it could inject some energy into the Sacramento housing market just as the spring buying season kicks off. However, there’s another factor complicating matters for potential homebuyers: The Fed indicated credit will begin to tighten, which would make it harder over the coming months to get a mortgage. That means potential homebuyers could have a window of opportunity right now to lock in a lower rate or refinance a mortgage that they took out between October and November, when rates were at their highest. (In most cases, a refinance makes the most sense when rates have dropped 0.75% or more. Rates this fall peaked at 7.24% — 0.87 percentage points higher than they are now.) Comparing rates between multiple lenders will help you find the best loan for your situation. 30-year fixed mortgage interest ratesOn average, the interest rate for a 30-year mortgage on April 4 is 6.37%, down from 6.60% on March 28. 15-year fixed mortgage interest ratesOn average, the interest rate for a 15-year mortgage on April 4 is 5.81%, down from 6.00% on March 28. Jumbo mortgage interest ratesOn average, the interest rate for a 30-year fixed rate jumbo mortgage on April 4 is 5.96%, up slightly from 5.95% on March 28. 5/1 adjustable-rate mortgagesOn average, the interest rate for a 5/1 ARM on April 4 is 6.60%, the same as it was on March 28.(All rates are according to Mortgage News Daily.)What determines mortgage rates?Mortgage rates are influenced by a variety of factors, including:Your credit scoreDown paymentYour debt-to-income ratio (DTI)The type of loan you’re gettingLoan termInterest rate type (fixed vs. adjustable)Inflation and the overall economyThe Federal Reserve (which doesn’t set mortgage rates, but it certainly influences them)Should you refinance your mortgage?With mortgage rates dropping, a mortgage refinance could potentially save you money both on your monthly payments as well as the entire life of your loan. Here are a few factors to consider:Cost: If you refinance your mortgage, you must pay closing costs just like you did when you took out the loan in the first place. The average closing costs come to around $5,000 on a refinance, according to Freddie Mac. Other costs can include mortgage origination fees, appraisal fees, title fees and more. All told, the cost of refinancing a mortgage typically totals 2%-5% of the principal. If the closing costs outpace how much you’d save by refinancing, then it doesn’t make sense to alter your mortgage.How long you plan to stay in your home: You want to make sure you plan to stay in your home long enough to recoup the closing costs and other fees associated with refinancing your mortgage. For example, if it costs $4,000 to refinance your mortgage but you lower your monthly payment by $200, it will take you 20 months, or a little less than two years, to break even.Refinance rates: In most cases, it makes sense to refinance if mortgage rates drop more than three-quarters of a percentage point. The rate for a 30-year fixed-rate mortgage peaked this fall at 7.24%, so if you took out a mortgage between October and November, it could make sense to refinance now.Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was originally published on SFGate.com and reviewed by Jill Slattery, who serves as VP of Content for the Hearst E-Commerce team. Email her at [email protected].
https://www.kcra.com/article/sacramento-housing-market-mortgage-rates-two-month-low/43511788
