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Chart: California Mortgage Rate History and Trends

To start the new year, we’re taking a look back at California mortgage rate history over the last 12 months. The chart below shows mortgage rate trends in three loan categories, during all of 2016. We’ll follow that up with the latest forecasts from analysts.

Chart: California Mortgage Rate History for 2016

The following chart, courtesy of Freddie Mac, shows 12 months of mortgage rate history for California and the rest of the U.S. This chart was published on December 29, along with the latest results from Freddie Mac’s weekly market survey. If a picture is worth a thousand words, then this chart speaks volumes.

Chart, California mortgage rates

California mortgage rate trends during 2016. Source: Freddie Mac primary market survey.

A couple of things will leap out at you right away. First, you’ll notice a steep upward slope on the right side of the chart. That’s a recent trend that took place over the last few weeks of 2016. California mortgage rates began to rise following the U.S. presidential election, and they continued rising straight through the end of 2016.

At the start of 2017, the average rate for a 30-year fixed home loan was 4.32%.

Summary of Trends Over the Last 12 Months

For 2016, California’s mortgage rate history and trends could be summed up as: “Mostly stable with an end-of-year surge.” The chart above shows this clearly enough. There were three notable trends during the last 12 months:

  • Average rates in the three loan categories shown above dropped during the first few weeks of 2016, despite earlier economic forecasts that predicted a steady rise throughout the year.
  • The average rate for a 30-year fixed home loan hovered below 4% for most of last year.
  • Then, during the first week of November, California and national mortgage rates rose sharply to end 2016 at a two-year high.

Forecast for 2017: A Gradual Rise Ahead?

So that covers California’s mortgage rate history and trends for the last 12 months. The big question now is, what can we expect in 2017? What are industry analysts forecasting for the next 12 months? For this, we will refer to the economists at the Mortgage Bankers Association (MBA).

According to the MBA’s latest predictions, home loan rates will climb gradually and modestly during 2017. Here is their latest quarter-by-quarter outlook:

  • Q1 2017: 4.3%
  • Q2 2017: 4.4%
  • Q3 2017: 4.6%
  • Q4 2017: 4.7%

The economists at Freddie Mac have a slightly different take on this. Their latest forecast, publishing in December, suggests that the average rate for a 30-year fixed mortgage loan will hover around 4.2% throughout 2017. This is a more stable forecast than the gradual rise scenario predicted by MBA. But Freddie Mac’s analysts added that “interest rates will gradually rise as the Federal Reserve continues on its path of policy normalization.” So they overlap in that regard.

The one thing we can say with certainty is that we will start 2017 with higher rates, on average, than we saw at the beginning of 2016.

Disclaimer: This California mortgage rate history includes forecasts made by third parties not associated with our company. We have presented them here as an educational service to our readers. The rates mentioned throughout this article are based on averages. Actual, individual rates can vary based on the type of home loan being used, the borrower’s qualifications, and other factors.

Need a loan? Are you in the market for a mortgage loan? We can help. Bridgepoint Funding has been helping Californians with their mortgage financing needs for more than 15 years. Please contact us for a rate quote, or with any questions you have.

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