One year ago, the interest rate on a 30-year fixed conforming and FHA loan was 4.875%, an incredibly low rate. However, the rate for those same loans today stands at only 5.125%, a mere ¼ point increase. With the 7.5% decrease in median home value in Truckee for homes in the conforming price range in the past year, Buyers are still ahead if they purchase today.
Jumbo loans are a different story. One year ago, a 30-year fixed jumbo was 7.875%. Today, it’s 5.75%, a 2.125 point drop. The median price of homes in the jumbo arena dropped over 6%, so with both interest rates and value of those homes down, Buyers can buy much more than they could have a year ago. So those who decided to “wait and see” made a good decision.
HOWEVER, neither the interest rates nor the home prices will stay this low. We certainly hope that Buyers trying to outsmart the market won’t be left out in the cold. Literally.