June 30, 2013

Mortgages Up Half Point in a Week: You are Officially Priced Out Forever

Here’s some cheery news for you from our local Website That Was Once A Newspaper Too!

Biz Break: Mortgage rate skyrockets amid housing market turnaround

By Jeremy C. Owens, San Jose Mercury News
Posted:   06/27/2013 03:47:57 PM PDT; ‘Updated:   06/27/2013 04:40:57 PM PDT

Today: 30-year mortgage rate takes a nearly unprecedented one-week jump to its highest point in two years as the real-estate market heats up. Also: Apple (AAPL) continues to decline even as Wall Street has third straight day of gains.

The average rate for a 30-year mortgage experienced its largest one-week increase in more than a quarter-century, as the housing market continues a booming turnaround from the crisis that precipitated the Great Recession.

Mortgage buyer Freddie Mac reported Thursday that the rate had increased from 3.9 percent to 4.46 percent in the past week, the highest rate recorded in more than two years. The rise in the mortgage rate is even more striking when comparing it to near-record-lows experienced less than two months ago — in early May, the average rate was 3.35 percent. Bankrate.com reported that the 3.35 percent rate on a $200,000 mortgage would result in monthly payments of $881, while the 4.46 percent rate would cost a buyer $1,008 a month.

The rise comes as the housing market roars back to life so quickly that some in the Bay Area have asked if the region has entered another housing bubble. Home prices in the Bay Area hit their highest average in five years in May, according to DataQuick, returning to levels last seen before the Great Recession had most of its effects on the market. That mirrors a national rise, with the Standard & Poor’s/Case Schiller index tracking the highest annual gain in home prices since 2006 in April, as San Francisco joined three other large metro areas in increases of more than 20 percent.

130629-mortgages-forsaleWe’ll stop you right there with a reminder that we called Bay Area Bubble 4.0 and have continued to call Bay Are Bubble 4.0 months and months ago. You can see how behind the Murky News is on this, running a story by one of their own reporters and using an AP photo of a house in, we kid you not, Illinois.

130629-mortgages-openhouseflagAlthough maybe we shouldn’t point and laugh, because houses in the Real Bay Area sell too fast for anyone to bother with For Sale signs anymore.  Instead they use For Sale flags.  Much faster to wave one around for a couple of minutes, collect the overbids, and head back to the air-conditioned office.

We like this one, especially because the tree is doing the agent’s job.

Are you trying to buy a house or do you know someone who is? Are you trying to refinance and are you kicking yourself for waiting too long? What kinds of rates are you being offered by your bank or mortgage broker? 

Comments (12) -- Posted by: madhaus @ 7:06 am

12 Responses to “Mortgages Up Half Point in a Week: You are Officially Priced Out Forever”

  1. sprezzatura Says:

    Guess I won’t be doing that refi after all.

    Still glad I bought last winter though.

  2. Steve Tyler Says:

    I’m starting to think that about a year from now might be a good time to buy. The interest rate rise will drive out even more ordinary buyers, so everything will be driven by the speculators, and they’ll eventually panic and run for the exits.

    The biggest worry I have is inventory. If prices crash again, and the banks won’t move on foreclosures, everyone who is underwater will just keep sitting and waiting.

  3. peanutbutter Says:

    Guess this sounds lame… but sure glad I bought a year ago.

  4. mtv-renter Says:

    I’ve been reading this blog for years, and yet despite that, I bought an overpriced place last week, rate is 4.5%. I’m sure I’ll be underwater in the next few years, but I got tired of going from rental to rental with my family.

  5. Petsmart groomer Says:

    > I’ve been reading this blog for years, and yet despite that, I bought an overpriced place last week

    Despite that?!? You should have known, years ago, that NOW is the right time to buy. What took you so long?

    What will ‘mtv-renter’ become?

  6. very amused Says:

    mtv-renter -> epa-owner.

  7. SiO2 Says:

    MTV-renter, enjoy!
    Renting has its advantages. But I know a family whose landlord gave them 30 days to move as the ll will sell. That’s perhaps too much excitement.

  8. 100% STUNNING LOOK NO FURTHER WOW [Burbed.com] Says:

    […] Hey, when the first listing photo isn’t the front of the house, you know this is going to be good. By which we mean bad. And that’s good.  Let’s check in with mtv-renter, who may be updating that handle. […]

  9. SV Shopper Says:

    It took me a little while too, but I’m glad I bought! I’m good with whatever happens from now on. BBQ in your own backyard on July 4th is priceless to me, and so is Los Altos schools!

  10. madhaus Says:

    Why is it priceless to you if I barbecue in my own back yard? Wonder whose Los Altos schools you’re coveting along with my barbecue.

    If you really did buy, do tell us a bit more about your experience doing so.

  11. SEA Says:

    “BBQ in your own backyard on July 4th is priceless to me, and so is Los Altos schools!”

    Cost accounting is simply too tough.

  12. nomadic Says:

    #10, it’s priceless to me because it keeps you out of MY backyard. 😉 Oh, and away from the PA soccer fields the “outsiders” are rumored to tear up.

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