According to the L.A. Times, prices for homes climbed 7.1% in Los Angeles County in January compared to the prices in January 2016. The median priced home was $525,000. In Orange County prices only climbed 2.6% in the last year, but the median home is $635,000. The number of homes for sale is much lower than the number of families who want to buy. That puts upward pressure on prices.
When will the dizzying price increases stop?
Usually, prices level off when homes are just not affordable to the majority of home buyers. A combination of higher prices and higher interest rates eventually makes buying a home too great a financial strain. So, far that tipping point has not been reached and prices will probably increase at least through the summer.
Regarding interest rates, the Federal Reserve is on a path to increase their rate several times this year. Another rate increase of one quarter percent is all but certain for this month. When this occurs, mortgage rates for variable rate mortgages (including home equity loans) will go up. Long-term fixed rate mortgages will also rise over time. Still, rates are no higher now than they were in 2014 (see chart below).
So, if you want to buy or refinance to get cash for home improvements or remove mortgage insurance, now would be the best time to do this, as rates will go higher from this point forward. Call me and we can see what makes sense for your situation.