If you haven't been following mortgage rates, they are higher than they were in April--you can read all about the rise from 3%-4.25% here if you want the technical explanations. But let's look at these last two months with a bit of perspective here. Things ain't as bad as they seem to be. Consider this chart:
Now it's time to offer some perspective:
1- Mortgage rates were between 5.5% and 6.5% for the 5 year period between 2003-2008. Home prices were much higher than they are today and incomes (in inflation-adjusted dollars) were lower than today.
2- Unemployment is much higher today than that period.
3- Rates dropped a lot after the Fed's QE program was implemented, went from 5% to as low as 3% last month. Today, rates are in the low 4s which is mid-range for the last five year period and much lower than the previous 5-year period.
4- Home prices are barely at 2004 levels.
1- if you are one of the 90% of Californians that have a job, you can probably buy a home--it will cost less than it would have cost you in 2004
2- the run up in rates might soften the inventory problem and there may be room to negotiate for closing costs help or price reductions from sellers.
3- rates are sometimes temporary (you can always refinance if rates drop) while price paid is permanent--take advantage of the expected softness in the market