With Rates Down, Is Now the Best Time to Buy a House in California?

With home prices expected to continue rising through 2017, and with a recent drop in mortgage interest rates, this could be the best time to buy a house in California.

Updated version: Buying in 2018 vs. 2019

Yesterday, the mortgage-buying corporation Freddie Mac published the latest results from its weekly industry survey. And it caught the attention of home buyers across the state of California. According to Freddie Mac, rates fell to their lowest point of the year (to date) during the week of May 25, 2017.

It has a lot of would-be buyers asking the same questions: Is now the best time to buy a house in California? Should I buy now, in 2017, or down the road in 2018?

It’s not a simple yes-or-no question. There are many variables involved. But for a lot of Californians, current conditions are ideal for buying a home. Rates are lower now than at the start of 2017, but they’re expected to be higher in 2018. The state’s economy has improved. And there’s a chance that house prices will continue to inch upward in most cities across the state. So a case could be made for purchasing sooner rather than later.

Here are some recent housing market and mortgage trends to help you decide if now is the best time for you to buy a house in California.

Mortgage Rates Are Lower Now Than at the Start of 2017

During the first week of January 2017, the average rate for a 30-year fixed home loan was around 4.20%. That’s based on the weekly survey mentioned above. That average has fluctuated a bit since then and is currently hovering just over 4%, as of May 25. Rates have also dropped for other mortgage products, including 15-year fixed and 5/1 ARM loans.

We’ve seen some stability in recent months, with regard to mortgage rates. They’re lower now, in late spring 2017, than they were at the beginning of the year. But there’s no telling how long they’ll remain at this level.

In its latest finance forecast, published in May, the Mortgage Bankers Association predicted that the average rate for a 30-year fixed home loan would climb to 4.6 by the fourth quarter of 2017.

Of course, that’s just a prediction — not a certainty. But it’s another important consideration when deciding if now is the best time to buy a house in California. There’s a chance that home prices and mortgage rates could be higher in 2018 than they are now.

Home Prices Expected to Rise Further in Most Cities

Home prices across the state of California have risen steadily over the last few years. And while they appear to be slowing down a bit, they are still trending north. This is another important consideration for home buyers who are on the fence, and wondering if now is the best time to buy.

In May 2017, the real estate information company Zillow reported that the median home price in California was $497,500. That was an increase of 7.3% over the same month last year. Additionally, the company’s economists anticipate that house values in the Golden State will rise by around 2% over the next 12 months (through May 2018). That’s a smaller gain than the last few years, but it could still lead to higher home-buying costs going forward.

Best Time to Buy a House in California: 2017 or 2018?

All of this begs the question: Is now the best time to buy a house in California, in 2017? Or should you wait until 2018 to purchase? No one can predict future housing conditions with complete accuracy. But the experts seem to agree that prices will continue rising in most cities across the state, through 2017 and into the first part of 2018.

When you factor in the possibility that mortgage rates could also rise over the coming months, a case could be make for buying a home sooner rather than later.

As for the whole rent-versus-buy question, consider this. A study published earlier this year showed that renters in California and other parts of the country could buy a house without increasing their monthly housing costs. (See: renting versus buying in California)