Low mortgage rates helped California residents navigate a rocky real estate market in the first half of 2010, according to news reports. Even though many Californians express caution about their state's unemployment rate, the wave of foreclosures has largely passed in major cities like Los Angeles and San Francisco. With a falling default rate improving mortgage lender confidence, state and federal incentives can help you find an affordable California home at a great rate.
Mortgage lenders encouraged by California's recovery
Throughout the late 1990s and early 2000s, California represented everything positive about a booming real estate market. Skyrocketing real estate prices kept existing residents happy, while low mortgage rate quotes mitigated the higher cost of living for newcomers. Then, the nationwide mortgage crisis took its toll on residents of the Golden State. As reported by the San Jose Mercury News, the median home price in the Bay Area peaked at $665,000 in July 2007. By April 2010, the median home sale price had fallen to $370,000. Still, that figure represents a 21.7 percent increase from the same period in 2009, beating a 15.4 percent improvement in Southern California as reported by the Los Angeles Times.
California mortgage lenders promote state tax credit program
Mortgage lenders in California have worked hard to inform prospective buyers of a state home-buying tax credit modeled on the federal tax credit that helped spur real estate sales throughout the country. State officials have set aside $200 million to fund the program, which rewards home buyers with up to $10,000 in tax credits on qualifying sales. Economists say that the state government's intervention can help keep California mortgage rates low, regardless of whether federal officials renew the popular IRS tax credit program.
Not everything has returned to the way it was before the housing bubble, however. Reporters for the Times and the Mercury News had trouble finding California mortgage lenders willing to underwrite jumbo loans or other mortgages with relatively low down payments. Especially with low mortgage rates dominating California's real estate market, lenders want to feel that they won't get burned by further short sales and foreclosures. Still, with the right amount of cash and with government tax credits on your side, you can find some great deals on California real estate.