Friday, March 11, 2005

Mortgage rates continue to rise; another report shows fewer county residents can afford to purchase here.

O.C. home appreciation in doubt

The Orange County Register

Two reports on home financing released Thursday could spell bad news for the Orange County housing market.

Mortgage rates edged up slightly for the fourth week, one report showed. And an estimate of the number of local residents able to afford an Orange County home edged slightly downward.

"We're dead in the water as far as home-price appreciation" if interest rates rise another half-point, said Jeff Lazerson of Portfolio Mortgage Corp. in Laguna Niguel.

Orange County's average interest rate for a 30-year fixed mortgage with a one-point fee rose to 5.644 percent this week, the highest in seven months.

The average weekly starting rate for a one-year adjustable-rate mortgage was 3.512 percent. Lazerson and another expert blamed jittery bond traders for the pricier loans.

Paul Scheper of Loan Link Financial in Aliso Viejo noted that stronger-than-expected job growth triggered inflation fears, prompting an increase in rates.

"It's a knee-jerk reaction," he said, adding that there's "no need for concern or panic - unless the ... (jobs figure) does the samething again."

Borrowers are still paying less than they did last spring and summer.

Meanwhile, a new study by the California Association of Realtors showed that 12 percent of Orange County residents could afford to buy a local median-priced home in January. That's down from 13 percent the previous month.

"Wages are just not in line with home prices," Lazerson said.


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