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Southern California low interest rates, home sales on rise

The number of U.S. homes that received an initial default notice jumped 33 percent in August, according to RealtyTrac Inc.
September 15, 2011 12:00:00 AM PDT
Record low interest rates and Southern California homes sales are on the rise. Could the housing market be making a comeback?

Shelley Valencia and her realtor Chris Habitz figured this is a great time to take advantage of the lowest mortgage interest rates in more than 60 years.

"The rates are so amazing," said Valencia. "Who knows if they are going to get lower, if they are going to go up? I am completely happy with where we are at and what we got. So I think it is a great time to buy."

Right now a 30-year fixed rate mortgage is at 4.09 percent, that's down from last week when it was 4.12 percent. And if you're in the market for a 15-year loan the rate it is really low at 3.3 percent, which is the lowest rate ever.

"Sixty-seven percent of people can now afford a home, which is a lot more than what it used to be in years past," said Habitz.

In fact, a lot of buyers are now looking for bargains and are especially ready to snap up foreclosures in good areas. Like one of the houses Habitz sold in Burbank.

"This house was listed at $419,000 and we sold it for $433,000 in a matter of four days," said Habitz.

But we're about to see a new wave of foreclosures. Banks are getting tougher on homeowners behind on their payments.

Here in California last month there was a 55 percent increase in homeowners receiving a default notice from their lenders, putting it at the top of the list of states with the highest foreclosure rate.

On the other hand, home sellers have something to cheer about. For the six-county region of Southern California, over 19,000 homes sold last month. That's an 8.6 percent increase from July and up 6 percent from August of last year.

In some ways the housing market is beginning to show some signs of life.

"We're not out of the woods yet," said Habitz. "But it definitely looks like it's going to be a good end of the year, and it's a good start to next year."

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