House Flipping is Back as Mortgage Rates Increase to Highest Level in 2013
Current mortgage rates, which moved higher for the fourth consecutive week, have sapped refinance demand but hasn't put a dent in the demand for homes. Average 30 year conventional mortgage rates just hit a high of 3.81 percent this week, a sharp increase from last week's average 30 year mortgage rate of 3.59 percent.
Average 30 year rates are now up 47 basis point from the lowest point in 2013 which was 3.34 percent and are now at the highest point this year. Rates have moved higher but home buyers are back in most markets in the country driving home prices higher. The low supply of homes available for sale is the major driving force in the recent sharp increase in housing prices the past 12 months.
Those looking to buy a home to live in are not the only buyers who realize prices are moving higher. House flippers (buyers who buy homes, renovate them and resell them) are also back in the market. House flipping is returning to markets where home prices are increasing the most. In the state of California, the number of homes that had been flipped, bought and resold within six months is at the highest level since 2005.
PropertyRadar, a real-estate data firm, said about 6,000 homes have been flipped in California through April of 2013. This amounts to more than 5% of all homes sold statewide. It's no wonder home flipping is back. In some cities in California, home prices are moving up 18 to 23 percent year over year.
Low mortgage rates on short term adjustable loans also benefit flippers. Mortgage rates today on 5 year adjustable conforming loans can be found under 2.00 percent with points. The lowest California mortgage rates right now on 5 year adjustable loans in our rate database are at 1.75 percent with points. The lowest 5 year adjustable mortgage interest rates without points are still low at 2.25 percent.
If you're looking to buy a home in the state of California and you need a loan, the loan amount might be higher than the conforming loan amounts set by Federal Housing Finance Agency (FHFA). If that is the case, you'll need a jumbo mortgage to finance your purchase but you're in luck because 30 year jumbo mortgage rates today are also near historic lows.
Right now in our jumbo rate database, there is a lender listed in California offering 30 year jumbo rates at 3.50 percent with no mortgage points. 15 year jumbo rates are also just above record lows and right now we have one lender quoting 15 year jumbo interest rates at 2.75 percent with 2 mortgage points.
Search mortgagerates.ratesorama.com for a listing of lender's rates for your state.
RatesORama.com Average Mortgage Rates