For many, a home in Santa Cruz is just out of reach. Even though the famous quality of life available here attracts sun-worshippers, wave-seekers and other disciples of the California shoreline, all eager to settle down, desire is not enough. Wanting to own a home here is one thing. As with most real estate decisions, paying for it is another story.
However, those aspiring Santa Cruz residents might be one step closer to making their dreams a reality. Why? The Federal Reserve has smiled on home buyers (and sellers) with record-low mortgage rates: 3.31 percent for anyone with a solid credit score. The mortgage rates, tied to the unemployment rate—and intended to stimulate growth—will probably stick around until 2015, theorized the LA Times.
Ben Bernanke probably wasn’t thinking about the Santa Cruz real estate market when he announced the Federal Reserve’s decision to maintain lower mortgage rates. This decision will hopefully promote the well being of the housing market on a national level. But it might have special resonance for Santa Cruz. Local bloggers like CJ de Heer and the Landes Report noted the positive implications this legislation has for the Santa Cruz area, because of the small, self-selective nature of the local market.
Nationally speaking, lower mortgage rates are just part of the picture. Rising home prices, due to pent-up demand, have also played a role in the market’s increasing vitality. This plays out in a large-scale sense. After all, “market vitality” is usually not the reason anyone decides to buy a new home. Issues like location, price point, a short commute, and proximity to good schools, shopping, and entertainment, trump everything at an individual level. Still, these lower mortgage rates might be the little “nudge” prospective buyers need to take the plunge.
Lower mortgage rates tend to translate into more people buying homes, but they also mean that more people can keep their homes as well. That’s right: many homeowners are seizing the day, re-financing, and taking their monthly payments down a notch thanks to these new, more attractive rates. Ultimately this can only reduce foreclosures, and keep people in their homes, even in relatively expensive areas such as northern California.
It’s no secret that home building is a key driver of the U.S. economy. The Federal Reserve’s decision to maintain low mortgage rates will hopefully drive home building, buying, and re-financing right here in Santa Cruz too. For those in the market for a Santa Cruz new home, New Home Source has resources.
