Sacramento homes remain affordable
Real estate in Sacramento is undergoing positive changes. Following the recession, many metros across the nation were negatively impacted by the housing crisis and economic recession. However, an improving local and national economy is steadily improving the real estate market in the greater Sacramento area.
Home prices on the rise in Sacramento
According to the Federal Housing Finance Agency (FHFA), house prices have increased 0.7 percent on a seasonally adjusted basis from July 2012 to August 2012. For the 12 months proceeding August 2012, U.S. property prices have risen 4.7 percent. These positive changes are indicating a strengthening national housing market.
Several ZIP codes in Sacramento are showing positive changes in the local real estate market. Real estate news and data provider DataQuick reports that the Sacramento ZIP code of 95832 saw a 35.7 percent increase in property sales in September 2012 compared to September 2011. The median price of a house in the area increased 41.6 percent to $109,000. The community of Rancho Cordova also saw positive changes. The number of home sales in the neighborhood rose 9.4 percent from September 2011 to September 2012. Property values increased 30.8 percent to make the median cost of a home in the 95670 ZIP code about $157,000.
Mortgage rates are at historic lows
Residential financing assists the average potential homeowner will afford a property. Buying a house is an investment and many people are unable to pay cash. Consequently, mortgage rates play a significant role in how much a potential buyer will be able to spend due to how large or small their monthly loan payments are.
The Mortgage Bankers Association (MBA) expects to see $1.3 trillion in mortgage originations during 2013. This optimistic figure comes after the agency had to reevaluate its predictions for 2012 to $1.7 trillion. In addition, purchase originations are expected to reach $585 billion in 2013 - up from the previously predicted $503 billion for 2012.
"Mortgage rates are likely to stay below 4 percent through the middle of 2013, principally due to the announced ongoing purchases of mortgage-backed securities by the Federal Reserve under its QE3 program. The Fed has committed to buying $40 billion of agency MBS per month until the labor market shows significant signs of improvement. Based on MBA’s originations estimate, the Fed will be buying 36 percent of all mortgages originated in 2013, and a much higher percentage of those swapped into agency MBS," said Jay Brinkmann, MBA's Chief Economist.
The improving market could prompt potential homebuyers to consider the real estate in Sacramento. The properties located within the southern California metro offer access to sun, beaches and an improving local economy.