★ MARKETUPDATE ★ for the month ending June 30, 2013★

Realestate news for the month of June centered around higher interest rates after the Federal Reserve Chairman, Ben Bernanke, announced that the Fed would be slowing down the mortgage-and-bond buying purchases under the program known as QE3 by the end of the year. He further stated that the Fed planned to end all purchases as early as mid-2015. The reason for this announcement was because the Fed now felt that the economy was growing at a strong pace, unemployment levels have dropped and he expected them to continue to drop, so further stimulus would no longer be needed. This program helped bring rates to the lowest level seen in decades. After hitting this year’s low of 1.61% on May 1, the 10-year note spiked soaring to a 22-month peak of 2.667% Wednesday, its highest level since August 2011, before settling at 2.52% today.

★INTEREST RATES★
#Mortgage #interestrates were up sharply both for the week and month. A 30-year-fixed conforming mortgage is now at 4.38% up from 4.24% last week and climbing steadily from 3.75% a month ago. The rate was 3.57% on May 1, so rates are up almost a full percent in 60 days. A 15-year-fixed mortgage rate is now up to 3.46% up from 3.31% last week and up over half a point from 2.90% last month. Rates on high balance conforming $417,000 - $625,500 ( LA and Orange county and $598,000 for Ventura county) are about 1/8% higher than conforming and jumbo loans are about ½% higher.

This week Federal Reserve officials continued efforts to curb a rise in long-term interest rates, hoping to calm fears raised by comments made by Chairman Ben Bernanke that triggered turmoil in global financial markets. Officials say an increase in the Fed’s benchmark interest rate is still a way off and bond purchases could also be prolonged if the economic performance doesn’t measure up to forecasts.

So why did #rates rise? Is #Wallstreet fed up? Was the Federal Reserve testing the market’s tolerance with some well thought out comments? Will the Fed begin to unwind its efforts? Time will tell the answer to all of these questions. But I do assure you that the ride is not over. As we’ve seen in years past, there is always a secondary action to the immediate (usually over-reaction) reaction, but then again, most have been preaching for months, if not years, that rates can’t stay this low. Can they?

As a real estate professional, I don’t have all the answers when if comes to the future of interest rates. My guess....#Rates will likely dip again and level off in a somewhat upward trajectory. We have likely seen the record low rates come and go. This happens. It is the cycle. It is not doom and gloom. Rates are still low and people are still interested in buying houses. In fact, I typically see an uptick in home sales immediately after an interest rate rise as #Homebuyers fear further increases. For now, rates will be what they will be, and while they have an impact, they certainly are not the largest reason that someone should or should not buy a home.

★HOME PRICES★
Reports on #Home prices continue to beat expectations. The California Association of Realtors reported that the median housing price in #California increased 31.9% in May, the largest year-over-year increase in 33 years. Inventory levels remain low while the number of sales in May continue to rise.

In May, there was a 2.6 month supply listings at the current sales rate, down from 3.6 % a year ago. A six-to-seven-month inventory represents a balanced market. DataQuick reported that an estimated 42,293 new and resale houses and condos sold statewide last month. That was up 8.3 % from 39,051 in April, and up 1.2 % from 41,790 sales in May 2012. The sales count was the second highest May ever reported behind only May 2006, where 54,099 homes were sold.

As always, if you need a #REALTOR to help you #Buy,#Sell,#Lease or #Invest, I would love to be of service.

I hope you have a great weekend!