Santa Barbara’s housing market is showing a rare increase in inventory, especially on the Mesa, where the number of active listings has risen from just two in mid‑August to thirteen today, according to local realtor Dan Johnson of Berkshire Hathaway. More homes on the market means buyers have additional options and potentially greater negotiating power.
Higher rates add pressure
At the same time, mortgage rates have surged to the highest levels seen in several years. National data shows the average 30‑year fixed rate hovering around 7.5%. That jump translates into a significant increase in monthly payments. Realtor Yawar Charlie explained that a $1 million mortgage now costs about $5,000 more per year than it did five weeks ago, a difference that can sway a buyer’s affordability calculations.
Ways to lower monthly costs
Mortgage professionals say buyers are not without recourse. Jon McCuskey, a consultant with Prosperity Home Mortgage, suggests negotiating seller contributions to buy down points, which can lower the interest rate. He also notes that a seven‑year adjustable‑rate mortgage (ARM) may provide immediate savings, though borrowers should weigh long‑term risks.
Buying down points involves paying an upfront fee in exchange for a reduced rate, and sellers sometimes agree to cover part of that cost as part of the purchase agreement. While ARMs often start with lower rates than fixed‑rate loans, the rate can adjust after the initial period, potentially increasing future payments.
Should buyers wait?
Some prospective homeowners wonder whether waiting for rates to fall is wise. McCuskey advises against a prolonged pause, especially in a market where inventory remains limited. “I wouldn’t wait,” he said. “The cost of waiting, especially in Santa Barbara where inventory is limited, usually doesn’t work out so well.”
Ultimately, the decision hinges on each buyer’s financial situation, how long they plan to own the property, and the loan terms they can secure. With more listings now available, buyers have the chance to compare homes and negotiate terms that fit their budget.
Local impact
The increase in Mesa listings could help balance supply and demand, offering families and individuals more flexibility as they navigate a challenging financing environment. While higher rates are a headwind, the expanded inventory provides a counterbalance, allowing buyers to seek homes that meet both their needs and their financial constraints.
For Santa Barbara residents watching the market, the key takeaway is to stay informed, explore all financing options, and act promptly when a suitable property appears. The combination of more homes on the market and strategic financing tactics can help mitigate the impact of rising mortgage rates.
Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.
