It’s time to seize the opportunities presented by the dynamic housing market of 2024. Home prices in California continue to rise and set new records. Data from Houzeoi reports that California homes continued to sell at eye-popping prices in early 2024. The median home sale price rose 6.5% year-over-year from $693,800 to $739,100 in January 2024. The number of homes sold increased from 14,941 to 16,220.
Home values in California rose by 40.6% in the last 5 years. Home sales increased by 8.6% in January, 2024 YoY and the mortgage rate climbed to 7.28%! So, California’s housing market remains resilient and in demand despite what the legacy media tells you. As of 2024, the housing market stands in stark contrast to the pre-Great Recession era. The previous housing bubble was characterized by easy credit, risky payment plans, subprime lending, zero-down loans, lenient qualification criteria, and fraudulent lending practices. Signs of an impending housing collapse were evident, with an oversupply of available homes and dwindling year-over-year demand.
Today, the scenario is entirely different. Conventional borrowers must meet stringent loan qualification criteria, demonstrating their ability to afford monthly payments. The process is deliberately designed to avoid a repeat of the 2007-2011 crisis. The current housing boom is fundamentally driven by the simple forces of supply and demand. The prevailing challenge is clear: there is a shortage of available homes to purchase, resulting in limited supply.
NAR’s chief economist, Lawrence Yun, sees no indication of a significant market downturn: “At a broad level, home prices are in no danger of a substantial decline due to tight inventory conditions. Moreover, the construction of new long-term housing has consistently slowed over the past few decades, leading to a demand that surpasses the supply by over five million homes.”
These substantial housing price increases translate into a significant increase in home equity. In the first quarter of this year alone, the estimated total home equity cashed out nationally amounted to $49.6 billion, marking an impressive 80% increase from the previous year, based on data from Freddie Mac.
Now, you may wonder, “How can existing California homeowners harness the current housing price surge?” In contrast to a challenging and restrictive Home Equity Lines of Credit’s (HELOC) designed for consumer purposes, a Business Purpose 2nd loan serves business or investment objectives. Consumer purposes encompass paying off credit card debt, funding education, or covering wedding expenses. Meanwhile, Business Purpose Loans provide capital for investments, business operations, equipment, or expansion plans.
A Cash Out and Capitalize Business Purpose Loan, utilizing your home equity, not only offers owner occupied and non-owner occupied property owners access to quick cash for real estate investments but also facilitates various ventures. Recent Business Purpose loans have financed Fix and Flip purchases, business partnership buyouts, VRBO rental properties, Accessory Dwelling Unit (ADU) additions, and even ventures like helping a friend purchase a Shrimp Boat in Louisiana. Whether it’s funding your dreams or supporting family and friends in their aspirations, a Cash Out and Capitalize Business Purpose loan can turn visions into reality today.
Mortgage Vintage, Inc. (MVI) proudly offers Business Purpose Loans in both 1st and 2nd positions. Explore this exciting loan program today and unlock your potential!