In the real estate market, being ahead of your game is everything. Being ahead doesn’t mean updated information but also the right sources to go to when you see a slight change in housing. So we bring you the real estate market update which will help you understand the market much better.
This market update cannot state facts about every region, but for Bakersfield California, you have got all the housing forecast and real estate info right here. Yes, you have stumbled upon a gold mine and you must benefit from it. Read on!
Table of Contents: Real Estate Market Update
Mortgage Rates
Right now the Bakersfield market is popping. What that means is not explicit unless we talk about the change in mortgage rates or interest rates as you may call it.
Housing authorities predict conventional rates in the high sixes. Meanwhile, the FHAs are to remain in the low sixes area. So the interest rates are to stay in the six percent bracket.
This rate has led to higher real estate activity because housing has become affordable to more people since the percentage has decreased from 7 to 6.
Experts say the housing rates will keep on increasing. Only in May, did the housing rates increase as much as 0.8 percent alone.
So it is your moment to buy. If you delay you will be hit by worse and higher interest rates.
Want to know the past market updates of Bakersfield real estate? Check out this blog for Feb.
Inflation
Photo by Karolina Kaboompics
Real estate experts suggest using the equity in one’s own house to buy another and working around the debt on loans or credit cards to have a low percentage on your mortgage.
But with inflation are these things possible?
People’s debt has increased manifold due to inflation. Even car payments which used to be 3 to 400 dollars have risen to 800 dollars a month.
Things are still expensive even though the inflation percentage has come down from 8 to 3 percent and the decrease is still in FEDs process which wants to bring it down to 2.
They are raising FED fund rates which in turn makes borrowing money expensive which means loans are difficult to acquire and even more difficult to return.
FEDs Dot plot
How the current and future real estate market will perform can also be found out through FEDs Dot Plot. What’s that?
FEDs Dotplot is the 19 voting members committee of FEDs which decides where the future internet rates will be in a few years. It’s an informed guess. The name is so called because they put dots on the graph to indicate the inflation and rates.
According to the members of the FEDs dot plot, Feds fund rates will decrease in the next 25 to 26 years. Yet the housing equity lines and car payments will keep on piling up due to FED policies.
Now FED fund rates impact mortgage rates but keep in mind they are not the same. So how do they impact mortgage rates? You need to keep an eye on FEDs!
Will Unemployment Impact Mortgage Rates?
It is very much possible that mortgage rates would change due to a poor job market.
If you see unemployment increasing that is one. indicator that eventually the mortgage rates would be lowered. But there has to be a long-term high level of employment to lead to rates coming down.
Unfortunately, the Bureau of Labor and Statistics does not release an accurate percentage of joblessness in the country. The number shown is much lower which excuses the FEDs not to decrease the interest rates.
This they do to stopping excessive spending and according to experts if they succeed there is a chance that the rates will come down below 6 that is to say 5.9 or even 5.8.
Buying your house for the first time? Check out this detailed 3 Part Guide.
Renting vs. Buying
Rents have gradually become so high that people feel trapped in their rental homes. They understand that rents are almost as high as buying their own home.
This pushes them towards saving up for a home building loan instead of filling their landlord’s pockets. So where does it lead them?
To the First homebuyer programs!
First Homebuyer Programs
To get first homebuyer programs you need to start by cutting your debt. It is crystal clear that for a good credit score, your debt should be minimal. This can be the first step towards buying your own home.
Even if you don’t have a down payment saved and are living from paycheck to paycheck you can start with having a good credit score and you can have 0 percent down with these first buyer programs.
You need a 700 or above credit score and you are good to go. You get a first mortgage at 97 percent and then a second mortgage at 3 percent on which you have no ACR interest. This is your down payment.
It’s free borrowed money. It will be paid once you sell the house. This means less money is to be paid upfront and this program encourages people to buy more.
Private Mortgage Insurance
The question here is if private mortgage insurance like FHA can also get you this 3 percent loan. Well yes, it is very much available for them too. It is just like any other conventional loan so it works for mortgage insurance.
It is concerned with your credit scores and other factors just like any other common loan.
For military veterans, one of the best loans is the VA loan. There is no requirement for great credit scores and has 0 percent down as well. So if you or anyone in your family is in military service currently you can get this loan to pay your mortgage.
Current Trends in Bakersfield
Bakersfield has seen an immense jump of 6 percent in selling since May 2024 as seen on the MLS trends graphic. Another trend seen on the same graph is that per square foot the price is gradually increasing.
Fewer homes were on the market as most of the homes were quickly purchased. But right now the spring selling market is hot and a lot of real estate activity is occurring at Bakersfield.
What’s next?
The rates won’t dramatically decrease over a month or two so the best thing here is that you buy as soon as you can because the trend of houses getting expensive is still getting higher with time.
And there’s a lot of competition too. A report by NARs recently revealed that with a one percent drop in interest rates about 5 million Americans become eligible to buy into real estate. So that’s a lot of competition for you and you don’t want to be left behind in this race.
If you still can’t find something dreamy in Bakersfield as a first home buyer don’t be bothered. Research says that first homes are rarely your forever homes.
So instead of looking for your dream home just get into the market and you will eventually reap the benefits later when you sell it. Do not delay buying.
Plus Bakersfield is 57 percent cheaper than most Californian counties. That’s your motivation for buying into Bakersfield right there.
Final Thoughts
So the final takeaway is you buy into real estate without further delay. Don’t look for perfection instead look for getting into the market right now. We hope that this real estate market update will help you understand the real estate market more. Adios!
