American Pacific Mortgage

American Pacific Mortgage

Monday, August 7, 2023



The recent heat wave has brought not only higher temperatures across the country but also higher interest rates.  I guess you could say “careful what you wish for”…we were so tired of the cold, but we were not looking forward to a rate rise.

With the recent Fed rate hike of another .25%, up to 5.5%, it brought Prime Rate to 8.5%.  This is the highest Prime Rate since 1991.  What is Prime Rate?  It is the rate generally used by banks to lend to customers with good credit and is oftentimes used as an index for floating rate loans such as a Home Equity Line of Credit.

Mortgage rates have risen as a result and should level off as we don’t anticipate any more Fed Funds rate hikes.  Recession hopes (or fears) are lessening and a soft landing seems to be on the horizon.  What does that mean for interest rates?  They are likely to ease more slowly than we anticipated earlier in the year.  They will eventually come down, but it may take longer so don’t hold your breath for rates in the 3’s or 4’s again. 

Essentially, we’ve just about hit the average mortgage rates for the last 50 years.  Back when I had to walk miles through the snow to get to school, they were almost identical to today before they shot up in the early 80’s (18%!) and proceeded to generally decline over time from that point until July of 2021.


While low inventory continues, there is little downward pressure on home prices.  It is now apparent that few homeowners with a rate in the 2’s or 3’s have any motivation to sell, unless they are moving out of state or are experiencing a life change-- (job change, divorce, or death) There are rumors of stagnation in the “luxury” market, i.e. slower pace of selling for homes over $2 to $3 Million. Home prices have risen as of the latest sales in most Southern California markets.


Did you know…we have a construction lending department that can provide construction loans for rehab purposes as well as new construction.  They are a bit more complicated as funds are doled out as work is completed and invoices provided, and there is a lot of up-front planning that takes place such as approval of architectural plans, appraisal, contractor, etc.

BEACH TIME and FAMILY UPDATES – Sailing and Swimming!

We recently spent four days camping in Carpinteria on the beach.  We had most of the family there, which was a real treat.  Barbeques, sitting around the campfire, playing in the ocean and on the sand, and taking beach walks in the morning was all part of the experience. We had to watch for the raccoons who were voracious and got away with an entire carton of eggs one evening in our presence!  They are sneaky and fast!

Grandson Theo in San Diego has been killing it in his sailing races.  He just competed in the Jr. National Sabot Championships in Newport at NHYC and came in 19th overall out of 150 sailors.  He was also in the top 10 in the preliminaries.  WOW!  WAY TO GO THEO.

My granddaughter Kay (AKA Karen, my namesake) is age 6 and just finished her very first swim meet and won both her events – the 25 free and 25 fly.  Big surprise as her mama, my partner Katie, was a very competitive swimmer through high school, although college was all about Water Polo. Go Bears!

As always, we are here to help with any questions!