Costa Mesa Real Estate Blog

Waiting is not the cure...I often point out to my clients that now is a better time to buy real estate in Costa Mesa because the interest rates have been at such a reasonable level. Today, interest rates for Costa Mesa Homes are at approximately 6 1/8 with no points.  Inflation in the economy creates more problems than a buyer can see at the surface.

Of course, inflation is particularly bad from a buyer's point of view, because the Federal Reserve's main weapon against inflation is higher interest rates. Anybody remember buying a home in the 70's and 80's at double digit rates?

Well, guess what? The way the economy is going, the Fed will undoubtedly be forced to raise short term interest rates. Now, think about the other side of the buyers/sellers fence.

Inflation is not entirely bad from a home owner's perspective- it would help stop the drop in home values for one thing, at least on a nominal level- on the whole, inflation is a specter we want to avoide. It erodes confidence and prooductivity in the economy and distorts the allocation of capital.

However, with oil prices continuing to rise, the Fed will have little alternative but to tighten its monetary policy, raising its target interest rate before the year's end.

Do the math- a quick calculation at today's rate (6.25%) on a 30 Yr. fixed mortgage on a $400,000 loan amount is $2462 and change.....Were the interest rate to rise in the same scenario to 7.25 %the same paymnet would be$2728, nearly $275 higher.

With a near bottom on real estate prices, you are better off buying today and going for the lower interest rate. Call or e-mail me (714-743-9882 or Colin@VerandaHomes.com) to ask for even better ways to lower your rate below  todays current 6.1875%.  I just found a home for a buyer and obtained a 5.375 interest rate with a little know buyer's tactic I often use.

Happy house hunting!!