Summer 2021: Still a Good Time to Refinance a Home in California

As of summer 2021, it’s still a good time to refinance a mortgage loan in California. (For many homeowners, at least.) Mortgage rates continue to hover well below 3% on average, while home prices continue to climb.

These favorable refinancing conditions could continue through the end of 2021.

Granted, every refinancing scenario is different. Some homeowners are in a better position to refinance than others, due to their current mortgage rate and equity position. But generally speaking, the second half of 2021 is still a good time to refinance a home in California. Let’s explore the reasons why.

Still a Good Time to Refinance in California

According to the latest industry survey conducted by Freddie Mac, 30-year fixed mortgage rates dropped slightly during the first week of August 2021.

During that week, the average rate for a 30-year fixed home loan in California and nationwide was 2.77%. That’s close to where we were at the start of 2021. This is one reason why it’s still a good time to refinance an existing mortgage loan in California.

Back in January, 30-year mortgage rates were averaging around 2.65% nationwide. They rose to a high of 3.8% by April of this year, but have dropped steadily since then. Now, as we move further into the summer of 2021, home loan rates in California are still averaging well below 3% for a 30-year fixed.

Depending on your current mortgage rate, the latter part of 2021 might still be a good time to refinance in California. If you can shave enough basis points off your current rate by refinancing, you could save a substantial amount of money going forward.

But we don’t know how long the current low-rate situation will last. Some predictions, including one issued by Freddie Mac just last month, suggested that mortgage rates could gradually rise in the months ahead.

For now, however, it’s still a good time to refinance for many homeowners across California. And low mortgage rates have a lot to do with that. But there’s another important factor that plays into this, as well…

Home Prices Higher Than a Year Ago

Home prices can also determine when it makes sense for a person to refinance. Generally speaking, rising home values put homeowners in a better position to refinance by increasing their equity.

In a typical refinancing scenario, homeowners need to have a certain amount of equity in their homes to qualify for a loan. Rising home values help them reach that target equity level.

This is another reason why 2021 is still a good time to refinance a mortgage in California. House values across the state have risen steadily and significantly over the past year or so. And they continue to climb in most cities across the state, as we move further into the summer.

According to the real estate data company Zillow, the median home value in California rose by nearly 19% over the past year or so. (This was reported in early August 2021.) Some cities with highly competitive real estate markets have experienced even bigger price gains over the past year.

As a result of these trends, many homeowners across the state now have a lot more equity in their homes compared to a year ago. Having a good amount of equity makes it easier to qualify for (and benefit from) a refinance loan.

This, combined with the low mortgage rates mentioned above, is why 2021 is still a good time to refinance a mortgage in California.

Will Refinancing Work for You?

Refinancing can make sense in some scenarios, but not in others. It depends on several factors.

For some California homeowners, 2021 is still a good time to refinance an existing mortgage. Homeowners who have sufficient equity and mortgage rates above current rates could benefit by refinancing their homes. The first step is to determine whether or not a refi will benefit you, given your particular situation.

And that’s where we come in.

Located in the Bay Area, Bridgepoint Funding serves homeowners across the state of California. We can review your current mortgage rate and equity situation to determine if refinancing will work for you.

Mortgage rates have dropped to historically low levels again, but we don’t know how long that will last. So it might be best to move forward sooner rather than later.

Please contact our staff if you have questions about refinancing your home in California, or if you would like to begin the application process.