According to a leading Beverly Hills-based real estate agent, soaring home prices across the state are putting homes out of reach for many buyers, with more Californians, especially self-employed people, turning to non-qualified housing options.
Damon Germanides (pictured above), co-founder and broker at Insignia Mortgage, which primarily serves self-employed borrowers, told Mortgage Professional America that the shock of the dramatic increase in borrowing costs for 2022 and beyond is starting to wear off and that the company is seeing many self-employed buyers remain undaunted even as mortgage rates rise.
While some buyers may have stayed on the sidelines when interest rates started to rise, many are now used to the status quo and ready to buy. “Interest rates have gone up, and anyone who's been in this business for any length of time knows that interest rates aren't necessarily high, but the rate of change is extreme from where they were,” he says. “So it was a bit of a shock, but customers have adapted.
“It's amazing how consumers can adapt. People were shocked at the price quotes we gave them a year ago, and now they're like, 'Oh, that looks OK. It's better than it was a month ago.' Human nature is interesting.”
According to data from the Intercontinental Exchange (ICE), 328,000 ARMs have reset and another 102,000 are expected to reset, leaving thousands of homeowners facing increased mortgage payments. https://t.co/EhP10X3Kyn#Mortgage interest rates #HousingMarket
— Mortgage Professional America Magazine (@MPAMagazineUS) July 3, 2024
Lack of inventory remains a major theme in the state's housing market.
While the number of homes for sale across California has improved significantly year-over-year due to an increase in new listings, supply remains tight: Statewide supply in May was just two months' worth, unchanged from the same time last year, according to Redfin, and inventory remains well below levels expected around mid-2022.