Mortgage Rates at 15-Month High: What California Buyers Should Do Now

30-year mortgage rates have climbed to 6.85%, their highest level in over a year. Here's what this means for California homebuyers and how to navigate today's market.

Mortgage rates just hit 6.85% on the 30-year fixed loan — the highest we've seen in over 15 months — and the pressure is being felt across California's housing market.

Rising Treasury yields, driven by renewed bond market volatility and ongoing uncertainty around Federal Reserve policy, are pushing borrowing costs higher. For buyers, this translates directly into reduced purchasing power. A rate jump of even half a percent can add hundreds of dollars to a monthly payment on a California-priced home.

It's no surprise that August home sales slipped year over year. When rates push past 6.5%, many buyers step back — and some shift toward renting instead of buying. We're seeing that pattern play out right now.

One notable trend: adjustable-rate mortgages (ARMs) are gaining popularity as buyers look for ways to lower their initial monthly payments. ARM demand recently hit a summer high, which tells me borrowers are getting creative to make the numbers work.

My take? If you're a serious buyer or investor in California, this isn't the time to freeze — it's the time to strategize. Locking in a rate today, exploring ARM options, or revisiting your pre-approval could all make a real difference.

Ready to explore your options? Contact our team today and let's find the right loan strategy for your situation.