The statewide median home price was at $308,050 in April of this year, up almost 5 percent over last April. It was the first time the median price was above the $300,000 mark in nearly a year and a half (since December 2010). Prior to March, we had seen 16 months straight of year-over-year declines in the median price. However, in March and April the California housing market bucked that trend as constrained inventory levels put upward pressure on prices across the board. The median price in April was the highest since September 2010 and was 26 percent above the cyclical bottom of $245,230 back in February.
The bottom line is that minor price fluctuations have only a minor impact on the monthly payment, while even small changes in mortgage rates can make a big difference when calculating the monthly payment. In the long run, low mortgage rates should be a major deciding factor as rates are very likely to edge up over the next six months. When you have rock bottom rates, they really have nowhere to go but up. Waiting on the sideline could mean the difference between qualifying and not qualifying to buy a home.