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Today’s California Mortgage Rates: What to Know Before Making a California Home Purchase

A photo to accompany a story about mortgage rates in California Getty Images
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What Are Today’s Mortgage Rates in California?

For Tuesday, July 05, 2022, here are the current mortgage rates in California. The average 30-year fixed mortgage rate is 5.600%. The average 30-year fixed mortgage refinance rate is 5.560%. Today, the average 15-year fixed mortgage rate is 4.830%.

Looking at variable rate loans, the average 5/1 adjustable-rate mortgage (ARM) rate is 4.250%. 

This information is from Bankrate’s latest survey of the nation’s largest mortgage lenders.

Current Mortgage Rates in California

Loan TypeRate
30-year Fixed5.600%
15-year Fixed4.830%
5/1 ARM4.250%
30-Year Refi5.560%

First-Time Homebuyer Programs in California

California has first-time homebuyer programs that are available statewide, in addition to many more that serve specific localities.

The California Housing Finance Agency (CalHFA) has a variety of loan programs for purchasing a home in California, so if you’re taking out a mortgage through one of these programs and are a first-time home buyer (or haven’t owned a home in the last three years) then you can also qualify for down payment assistance through the MyHome Assistance Program.

If you meet the requirements for the MyHome Assistance Program, then you’re eligible for a deferred loan for the down payment or closing costs which doesn’t need to be repaid until you sell the home. The maximum benefits amount varies depending on the type of CalHFA mortgage you get:

  • CalHFA FHA or CalPLUS FHA loan – The lesser of: $11,000 or 3.5% of the sale price or appraised value, whichever is less
  • CalHFA Conventional, CalPLUS Conventional or CalHFA USDA loan – The lesser of: $11,000 or 3% of the sale price or appraised value, whichever is less
  • CalHFA VA loan – 3% of the sale price or appraised value, whichever is less

Most borrowers who qualify for this program can receive a maximum benefit of $11,000. However, school employees and fire department employees are not subject to the $11,000 cap.

California Mortgage Taxes

California may have higher state income taxes, but property tax rates are reasonable with the average effective property tax rate for owner-occupied homes in California being 0.70%, according to the Tax Foundation. California also has rules restricting how much the assessed value of your home can increase, to only 2% annually.

You may be able to deduct mortgage interest and property taxes from your federal and state income taxes in California. But this applies to you only if you itemize your deductions instead of taking the standard deduction. There are also other restrictions to consider. Federal law limits the mortgage interest deduction to loans of up to $750,000 and for California the loan limit for mortgage interest deductions is $1,000,000. 

California Mortgage Refinancing

Now’s an ideal time to refinance because refinance rates are exceptionally low. And refinancing a mortgage in California works the same as in other states, so the considerations are the same.

Every lender will quote you with a different interest rate and charge varying fees. Getting offers from a few different lenders will allow you to compare and ensure you’re getting the best deal you can qualify for. A general rule of thumb is to refinance your mortgage when you can reduce the interest rate by 1% or more. But the decision is more complex because you need to pay attention to other factors, such as the length of your loan, which impacts your rate and your monthly payment. And a low refinance rate may not be a good deal if you are paying excessive upfront fees.

Conforming and FHA Loan Limits by County

In order for a home loan to be classified as “conforming” it needs to meet the guidelines set by the Federal Housing Finance Agency (FHFA). Housing in certain areas of California is much more expensive than the national average. In these counties, the conforming loan limits are higher to account for the increased home prices.

Here are the conforming loan limits for each California county as outlined by the FHFA:

CALIFORNIA 2022 CONFORMING LOAN LIMITS BY COUNTY

CountySingle-family Property
Alameda$970,800
Alpine$647,200
Amador$647,200
Butte$647,200
Calaveras$647,200
Colusa$647,200
Contra Costa$970,800
Del Norte$647,200
El Dorado$675,050
Fresno$647,200
Glenn$647,200
Humboldt$647,200
Imperial$647,200
Inyo$647,200
Kern$647,200
Kings$647,200
Lake$647,200
Lassen$647,200
Los Angeles$970,800
Madera$647,200
Marin$970,800
Mariposa$647,200
Mendocino$647,200
Merced$647,200
Modoc$647,200
Mono$647,200
Monterey$854,450
Napa$897,000
Nevada$647,200
Orange$970,800
Placer$675,050
Plumas$647,200
Riverside$647,200
Sacramento$675,050
San Benito$970,800
San Bernardino$647,200
San Diego$879,750
San Francisco$970,800
San Joaquin$647,200
San Luis Obispo$805,000
San Mateo$970,800
Santa Barbara$783,150
Santa Clara$970,800
Santa Cruz$970,800
Shasta$647,200
Sierra$647,200
Siskiyou$647,200
Solano$647,200
Sonoma$764,750
Stanislaus$647,200
Sutter$647,200
Tehama$647,200
Trinity$647,200
Tulare$647,200
Tuolumne$647,200
Ventura$851,000
Yolo$675,050
Yuba$647,200

Other types of mortgages follow different sets of rules. For loans backed by the Federal Housing Administration (FHA), the maximum loan size can be different than what it is for conforming loans.

Here are the FHA loan limits for each county in California:

CALIFORNIA 2022 FHA LOAN LIMITS BY COUNTY

CountySingle-family Property
Alameda$970,800
Alpine$463,450
Amador$420,680
Butte$420,680
Calaveras$420,680
Colusa$420,680
Contra Costa$970,800
Del Norte$420,680
El Dorado$675,050
Fresno$420,680
Glenn$420,680
Humboldt$420,680
Imperial$420,680
Inyo$431,250
Kern$420,680
Kings$420,680
Lake$420,680
Lassen$420,680
Los Angeles$970,800
Madera$420,680
Marin$970,800
Mariposa$420,680
Mendocino$506,000
Merced$420,680
Modoc$420,680
Mono$563,500
Monterey$854,450
Napa$897,000
Nevada$609,500
Orange$970,800
Placer$675,050
Plumas$420,680
Riverside$562,350
Sacramento$675,050
San Benito$970,800
San Bernardino$562,350
San Diego$879,750
San Francisco$970,800
San Joaquin$563,500
San Luis Obispo$805,000
San Mateo$970,800
Santa Barbara$783,150
Santa Clara$970,800
Santa Cruz$970,800
Shasta$420,680
Sierra$420,680
Siskiyou$420,680
Solano$614,100
Sonoma$765,750
Stanislaus$460,000
Sutter$420,900
Tehama$420,680
Trinity$420,680
Tulare$420,680
Tuolumne$420,680
Ventura$851,000
Yolo$675,050
Yuba$420,900

The Latest Housing News

What’s Going On With Rising Mortgage Rates?

The surge in mortgage rates so far this year is due to a variety of economic factors. Persistently high inflation is a big one, Jacob Channel, senior economic analyst at LendingTree told us. May’s inflation report shows 8.6% inflation and the highest in 40 years. In response, the Federal Reserve increased its benchmark short-term interest rate to combat that inflation. The Fed raised rates by 50 basis points in May and by 75 points in June, since inflation remained higher than expected.

Recently, we saw mortgage rates surge after the inflation report and ahead of the Fed’s announcement. “I think what we’re seeing is that lenders had already anticipated that the Fed was going to raise the fed funds rate by 75 basis points and they began to preemptively push mortgage rates up,” Jacob Channel, senior economist at LendingTree, told us.

Financial markets are still responding to other global factors that can affect the economy, namely China’s COVID lockdown and Russia’s invasion of Ukraine. “​​We have a lot of factors like that that are putting upward pressure on mortgage rates,” Channel says. “The volatility has been through the roof,” Shashank Shekhar, founder and CEO of InstaMortgage, told us. “The market has been adjusting to a new news cycle practically every single day.”

What Can Homebuyers Do About Rising Mortgage Rates?

A higher mortgage rate leads to a higher monthly payment, which can eat into your total buying power. But, experts also point out that these 5.5+% rates we are seeing right now are still considered normal from a historical perspective. It was only a few short years ago when a “good rate” was around 5%. 

Rising mortgage rates also mean the rate you might be quoted one day could be significantly different than one you get the next day. Experts caution against trying to time the market to get the best rate. “If you think you’re going to like the rate, lock it,” Jennifer Beeston, senior vice president of mortgage lending at Guaranteed Rate, told us. “Because it’s probably going to change in 20 minutes.”

Be sure to get quotes from different lenders to ensure you’re getting the best deal, experts say. “The rate highly impacts your monthly affordability for as long as you will hold this home,” Skylar Olsen, principal economist at Tomo, a digital real estate and mortgage company, told us. “It is actually a critical piece of this decision, and that takes shopping around.”

What Can Homebuyers Do About Rising Home Prices?   

When thinking about your mortgage rate, it’s also important to consider what’s happening to housing prices. According to data from Realtor.com, the median U.S. home listing price was $447,000 in May 2022, another all-time high. Experts say the big uptick in prices is due to a mismatch between supply and demand: There are a lot of people trying to buy houses, and there aren’t enough houses to go around. That means you probably shouldn’t wait around and hope for the market to crash. “I don’t think buyers should be betting on any really significant price declines,” Robert Dietz, chief economist at the National Association of Home Builders, told us

What you can do is think beyond just the mortgage rate. Be sure you’re in a good position to buy a house. “The most important thing that any would-be homebuyer should do is take stock of where they are personally,” said Channel. “Do I have enough cash to make my mortgage payments, to put money down on a down payment? Is my credit score good?” Then, be patient and be creative with your home search. Don’t rush for the first houses you see, he says. Look in unexpected places. One possibility is the U.S. Department of Housing and Urban Development’s page of foreclosed homes. “The more you plan and the more diligent you are before you really even start going out house hunting actively, the easier it is to navigate a housing market that is as hot and fast as this one,” Channel says.

It’s more important than ever to shop around for a mortgage when you’re in the market for a house, said Channel. When rates aren’t going up as dramatically as they are now, quotes from different lenders can regularly vary by half a percentage point. With the market moving so quickly, that could be even higher. 

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