American Pacific Mortgage

American Pacific Mortgage

Tuesday, September 12, 2023

Labor Day Blues! Fall Market Update

Summer is almost over, and the children are all back to school. How did it possibly go by so fast? We had a lot of rain and cold, and then a month of hot, muggy summer.

Now we suddenly have the beaches all to ourselves again (for those who live near the beach) while the kids’ sports and school activities are getting very busy!

Unfortunately, not so for the Real Estate market! We are still experiencing some of the lowest loan application rates seen in 28 years. And rates continue to rise. We are well over 7% for most conventional loans today. Now, if you look at history 7% + is near the average, but what a sudden jump from 2022. And the short-term outlook isn’t rosy as inflation is bouncing up again. This, more than anything, has a direct effect on mortgage rates.

There have been seven rate hiking cycles from 1968 to 2008/09 that ended in a recession. It has taken on average 22 months from the first hike to the start of the recession. There were two cycles that didn’t end in recession. So, who knows?


State Farm, the largest home insurer in California has stopped writing new policies as of June. Others including AIG and Chubb are both NOT renewing policies in the state. AmGuard, Kemper and Allstate are out now also. Farmers is limiting its new policies.  Why? There are multiple factors, primarily climate change, more fires, and higher costs to rebuild due to inflation. The California State regulatory guidelines for insurers have not helped.

Don’t hesitate to contact us if you are experiencing insurance woes. We have a number of experts we can refer you to who can find your homeowner’s policy a new home.

What does this spell for the long term? It will make qualifying for a home loan more difficult with prices rising, particularly in certain zip codes which are labeled as high fire hazard areas. You know who you are!


We rounded out the end of summer with a lot of time spent at the ArtAFair in Laguna Beach, where Steve showcased his plein air and impressionist landscapes. For a neophyte he did very well and also obtained some new commissions. What is leftover is coming back home and I get to move my art in our home around a bit, which I enjoy. Changing up the landscape, so to speak!

We enjoyed some great music at various outdoor venues including the Art Festival and the Dana Point Concert series and attended the Pageant of the Masters in the Laguna Bowl, which is always entertaining.

Labor Day weekend brought out a huge crowd to the Dana Point Harbor, on various watercraft including surfboards, SUP’s, floaties, kayaks, and all manner of boats to hear our favorite David Allen Baker with the Kicking Giants band. What a hoot!

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