PHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiIHNyYz1odHRwczovL3N0YXRpYy5teWZpbmFuY2UuY29tL3dpZGdldC9teUZpbmFuY2Vfdmlld3BvcnRfZGV0ZWN0aW9uLmpzPjwvc2NyaXB0PjxzY3JpcHQgYXN5bmMgdHlwZT0idGV4dC9qYXZhc2NyaXB0Ij5teWZpV2F0Y2hXaWRnZXQoJ215ZmlXaWRnZXRfMTUnKTtteWZpV2F0Y2hXaWRnZXQoJ215ZmlXaWRnZXRfOScpO215ZmlXYXRjaFdpZGdldCgnbXlmaVdpZGdldF8xNS4xJyk7PC9zY3JpcHQ+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 painful environment for Sacramento homebuyers continues: Mortgage rates surged above 7% last week following the latest quarter-point rate increase from the Federal Reserve. And that’s not all: The Fed signaled that this might not be the last rate hike of this cycle after all, despite earlier predictions to the contrary.This most recent Fed rate hike brought the benchmark borrowing rate — that is, the interest on lending between banks — to 5.25%-5.5%. That’s its highest level in 22 years.The Fed has raised the federal funds rate 11 times in the past 17 months in its attempt to bring inflation under control. The moves appear to be working: There have been positive economic signals in recent weeks regarding both consumer prices and the labor market. But Fed Chair Jerome Powell cautioned that officials don’t want to give too much weight to a single month of data.So what does that mean for you? When the federal funds rate goes up, interest rates on products like mortgages tend to go up too. And, since the Fed indicated it’s weighing another hike in September, mortgage rates will likely stay high for a while longer.As it stands, the average for a 30-year fixed-rate mortgage is 7.05%, while the average 15-year fixed-rate mortgage is at 6.40%, according to Mortgage News Daily. The average for a jumbo mortgage stands at 7.10%, and the average for a 5/1 ARM, meanwhile, is 6.95%. Nonetheless, it is possible to find better mortgage rates by considering offers from various lenders, springing for discount points, and improving your credit score.Sacramento housing market trendsSacramento had the fifth-largest price declines in the U.S. for the four-week period ending July 23, according to Redfin. The median sale price was down 3.8% from that time last year. (Rounding out the rest of the list of top declines was Austin, Detroit, Phoenix, and Las Vegas.)Still, the market remains very competitive due to historically tight inventory. There were 43.5% fewer homes for sale in June 2023 than last year, according to the Sacramento Association of Realtors. New listings were down 35.8% during what’s usually one of the busiest seasons of the year. Redfin gives Sacramento a “Compete Score” of 87 (with 100 being the most competitive score) right now. For comparison, Roseville has a Compete Score of 79 and Elk Grove has a Compete Score of 84. Homes are selling, on average, for 2% above list price, with homes in the hottest neighborhoods regularly selling for 5% above list price.National housing market trendsHome prices are up 2.6% year-over-year, according to Redfin’s latest housing market report — the largest increase since November. Inventory not only remains incredibly tight, it’s also falling especially fast: It shrunk 17% over July 2022, the biggest drop in 18 months.Mike Fratantoni, SVP and chief economist with the Mortgage Bankers’ Association, expressed optimism that things could turn around later in 2023, if this ends up being the last rate hike. “While the market for new home sales has recovered considerably over the past few months, the pace of overall housing market activity remains quite slow,” he said. “We do expect mortgage rates to trend down once the FOMC clearly signals that they have reached the peak for this cycle, as the reduction in uncertainty with respect to the direction of rates should narrow the spread of mortgage rates relative to Treasury benchmarks.”Ready to move on anyway? Many real estate pros are dredging up the old adage, “date the rate, marry the house.” Translation: If you see your dream home now, you don’t necessarily have to pass it by while waiting for a better mortgage rate in the future. Consider taking out a mortgage now knowing that you’ll refinance once rates drop. Just a three-quarter point drop is enough to make refinancing worth it. And, as you look for the best possible rate right now, make sure you compare offers among multiple lenders. Just getting quotes from four lenders can save you up to $1,200 every year on your mortgage, according to a study by Freddie Mac. 30-year fixed mortgage interest ratesOn average, the interest rate for a 30-year mortgage on July 31 was 7.05%, up from 6.99% on July 24. 15-year fixed mortgage interest ratesOn average, the interest rate for a 15-year mortgage on July 14 was 6.40%, up from 6.35% on July 24. Jumbo mortgage interest ratesOn average, the interest rate for a 30-year fixed rate jumbo mortgage on July 31 was 7.10%, up from 6.98% on July 24. 5/1 adjustable-rate mortgagesOn average, the interest rate for a 5/1 ARM on July 31 was 6.95%, down from 6.96% on July 24.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)APR vs. interest rateIf you’re currently shopping for a mortgage or considering refinancing, you’ve probably wondered why the quoted interest rate isn’t the same as the APR. That’s because the loan’s interest rate is what you pay the lender to borrow the money, while the APR (annual percentage rate) encompasses both the interest rate and all loan-related fees. Loan-related fees can include:Mortgage broker feesLoan origination feesMortgage insurance premiumsSome closing costsThe APR, therefore, is a truer measure of what it will actually cost you to borrow money to buy a home.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 reviewed by Lauren Williamson, who serves as the Home and Financial Services Editor 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].
Hearst 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 painful environment for Sacramento homebuyers continues: Mortgage rates surged above 7% last week following the latest quarter-point rate increase from the Federal Reserve. And that’s not all: The Fed signaled that this might not be the last rate hike of this cycle after all, despite earlier predictions to the contrary.This most recent Fed rate hike brought the benchmark borrowing rate — that is, the interest on lending between banks — to 5.25%-5.5%. That’s its highest level in 22 years.
The Fed has raised the federal funds rate 11 times in the past 17 months in its attempt to bring inflation under control. The moves appear to be working: There have been positive economic signals in recent weeks regarding both consumer prices and the labor market. But Fed Chair Jerome Powell cautioned that officials don’t want to give too much weight to a single month of data.
So what does that mean for you? When the federal funds rate goes up, interest rates on products like mortgages tend to go up too. And, since the Fed indicated it’s weighing another hike in September, mortgage rates will likely stay high for a while longer.As it stands, the average for a 30-year fixed-rate mortgage is 7.05%, while the average 15-year fixed-rate mortgage is at 6.40%, according to Mortgage News Daily. The average for a jumbo mortgage stands at 7.10%, and the average for a 5/1 ARM, meanwhile, is 6.95%. Nonetheless, it is possible to find better mortgage rates by considering offers from various lenders, springing for discount points, and improving your credit score.
Sacramento housing market trendsSacramento had the fifth-largest price declines in the U.S. for the four-week period ending July 23, according to Redfin. The median sale price was down 3.8% from that time last year. (Rounding out the rest of the list of top declines was Austin, Detroit, Phoenix, and Las Vegas.)Still, the market remains very competitive due to historically tight inventory. There were 43.5% fewer homes for sale in June 2023 than last year, according to the Sacramento Association of Realtors. New listings were down 35.8% during what’s usually one of the busiest seasons of the year. Redfin gives Sacramento a “Compete Score” of 87 (with 100 being the most competitive score) right now. For comparison, Roseville has a Compete Score of 79 and Elk Grove has a Compete Score of 84. Homes are selling, on average, for 2% above list price, with homes in the hottest neighborhoods regularly selling for 5% above list price.National housing market trendsHome prices are up 2.6% year-over-year, according to Redfin’s latest housing market report — the largest increase since November. Inventory not only remains incredibly tight, it’s also falling especially fast: It shrunk 17% over July 2022, the biggest drop in 18 months.Mike Fratantoni, SVP and chief economist with the Mortgage Bankers’ Association, expressed optimism that things could turn around later in 2023, if this ends up being the last rate hike. “While the market for new home sales has recovered considerably over the past few months, the pace of overall housing market activity remains quite slow,” he said. “We do expect mortgage rates to trend down once the FOMC clearly signals that they have reached the peak for this cycle, as the reduction in uncertainty with respect to the direction of rates should narrow the spread of mortgage rates relative to Treasury benchmarks.”Ready to move on anyway? Many real estate pros are dredging up the old adage, “date the rate, marry the house.” Translation: If you see your dream home now, you don’t necessarily have to pass it by while waiting for a better mortgage rate in the future. Consider taking out a mortgage now knowing that you’ll refinance once rates drop. Just a three-quarter point drop is enough to make refinancing worth it. And, as you look for the best possible rate right now, make sure you compare offers among multiple lenders. Just getting quotes from four lenders can save you up to $1,200 every year on your mortgage, according to a study by Freddie Mac.
30-year fixed mortgage interest ratesOn average, the interest rate for a 30-year mortgage on July 31 was 7.05%, up from 6.99% on July 24. 15-year fixed mortgage interest ratesOn average, the interest rate for a 15-year mortgage on July 14 was 6.40%, up from 6.35% on July 24. Jumbo mortgage interest ratesOn average, the interest rate for a 30-year fixed rate jumbo mortgage on July 31 was 7.10%, up from 6.98% on July 24. 5/1 adjustable-rate mortgagesOn average, the interest rate for a 5/1 ARM on July 31 was 6.95%, down from 6.96% on July 24.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)APR vs. interest rateIf you’re currently shopping for a mortgage or considering refinancing, you’ve probably wondered why the quoted interest rate isn’t the same as the APR. That’s because the loan’s interest rate is what you pay the lender to borrow the money, while the APR (annual percentage rate) encompasses both the interest rate and all loan-related fees. Loan-related fees can include:Mortgage broker feesLoan origination feesMortgage insurance premiumsSome closing costsThe APR, therefore, is a truer measure of what it will actually cost you to borrow money to buy a home.
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 reviewed by Lauren Williamson, who serves as the Home and Financial Services Editor for the Hearst E-Commerce team. Email her at [email protected].
https://www.kcra.com/article/sacramento-housing-market-fed-rate-hike-july-31/44704061
