Some California Homeowners Could Still Benefit from Refinancing

A forecast from the Mortgage Bankers Association predicted that the overall volume of purchase loans (used by home buyers) would increase in 2019, while home-refinancing activity would decline. That’s not surprising when you consider that interest rates have risen over the past year.

But a separate industry report showed that there are still some homeowners in California and nationwide who could benefit from refinancing their existing mortgages. Here’s an update on these and other trends, as well as an outlook for 2019.

Refinancing: Some California Homeowners Still Have an Incentive

Is mortgage refinancing still a good option for California homeowners? With interest rates rising, a lot of homeowners across the state are wondering this very thing.

While the window of benefits has closed for many, a new report revealed that some homeowners still have an “interest rate incentive” to refinance their existing mortgage loans. The November 2018 report was published by Black Knight, Inc., a data and analytics company that serves the mortgage industry.

According to the report: “Just 1.86 million mortgage holders [nationwide] have an interest rate incentive to refinance, a 56 percent decrease from the start of the year.”

Granted that’s not a lot of homeowners, when you consider the overall size of the U.S. population. But the bottom line here is that there are still some in California and nationwide who could benefit from refinancing late in 2018, or even in 2019.

The above-mentioned report also showed that an estimated 6.5 million homeowners nationwide have now “missed their opportunity to refinance their mortgages due to rising rates.”

Long-term mortgage rates have climbed by roughly one percent since the start of this year. During the first week of January 2018, the average rate for a 30-year fixed home loan was just under 4%. When this article was written, during the first week of November, that average had risen to nearly 5%.

Despite this trend, there are still quite a few homeowners in California who could benefit from refinancing their existing mortgage loans. If you think you might be one of them, please contact us to explore your options.

Buying: More Inventory to Choose from in 2019

As for those planning to buy a home in California, 2019 could bring some additional (and much-needed) inventory to the market.

Last week, we cited a report that showed a significant increase in housing inventory across the San Francisco Bay Area. More homes have been coming onto the market. Specifically, there was a 130% increase in active listings from October 2017 to October 2018.

While these growth trends are most noticeable within the Bay Area, they are occurring in other parts of the state as well. So those who are planning on buying a home in California in 2019 could have more properties to choose from.

Home prices are expected to continue rising in most California cities, through the end of 2018 and into 2019. So those who enter the real estate market next year could encounter higher costs. Buying in 2019 might give you more options to choose from, in terms of inventory. But it might cost you more as well.

Check out our related report on why 2019 could be a good time to buy.

Have mortgage questions? Bridgepoint Funding has been serving borrowers in California for more than 16 years. Please contact us if you have mortgage-related questions, or if you’d like to receive a customized quote.