2015: Continued Upward Projections Seen for California Real Estate

The harder they fall, the higher they bounce. Local real estate markets in California were among those hit hardest by the national housing crisis and recession. Entire neighborhoods were emptied by foreclosure. House values dropped like a rock. Would-be home buyers retreated back to renting, sending the entire real estate market to a screeching halt.

But that was then, and this is now. In 2015, California housing markets could experience some of the biggest price gains in the country. This is according to an analysis and forecast by the economists at Zillow.

Earlier this year, the real estate information service Zillow published home-value predictions for hundreds of cities and metro areas across the U.S. It was meant to show where home prices “are headed over the next 12 months, from May 2014 through May 2015.”

The projections came in the form of an interactive (and highly addictive) tool that allows you to scale the projections up and down. In other words, you can “zoom in” to see which housing markets are predicted to appreciate the most in 2015. And guess what? They’re all in California and Nevada.

Mortgage Rates Hover At Their Lowest Levels Of The Year

Mortgage rates hovered at their lowest levels of the year for the third straight week this week, according to a survey published Thursday by Freddie Mac FMCC +1.14%.

The average 30-year fixed-rate mortgage stood at 4.1% for the week ending Wednesday, according to Freddie’s survey. To get that rate, borrowers had to pay fees equal to around 0.5% of the loan amount.

Mortgage rates have drifted down in recent weeks as bond yields on 10-year Treasury notes have fallen. Investors have bought government debt amid rising concerns over geopolitical instability.

Few expected rates would be this low at the beginning of the year. Indeed, one of the biggest surprises of 2013 came in the spring, when mortgage rates jumped suddenly as anxious investors sold off Treasury securities amid signs that the Federal Reserve was thinking about slowing down its bond-buying program.

By contrast, one of the bigger surprises of 2014 may be that mortgage rates might end the year lower than they began, at around 4.5%, even as the Federal Reserve has gradually pared back its purchases of mortgage-backed securities.