April Update

Spring Greetings!

My apologies for getting this out a little late, we have had a busy few weeks after my return from Mexico. With interest rates at near the 1 year lows we are seeing a lot of refinance activity as wells as certain local areas are seeing a lot of purchase activity. As you can see from the numbers noted below the homes available for purchase are up 19% over last year. At the same time we are continuing to see a large number of new housing developments being completed throughout the county. The word on the street is that these new build properties are being sold out quickly.

The trip to Mexicali Mexico was great. I went with 26 other adults from my church and we spent a week working with a local church and orphanage. We were able to complete putting some walls up around a 20X40ft area that will become a kitchen for the local church so they can prepare meals for the community. We also took 60 kids from the orphanage and two low income areas (Mexico low income) to a zoo/park/water park area for an afternoon of fun. The kids got to see lions and tigers as well as play in the pool and waterslides. I do much of the money management on these trips and was surprised at the cost. It was just at $1/person to get into the park and another $2/person to go into the pool/water slide area. These are kids that would not have been able to afford to go to this place on their own. Now compare that to the list price of a full day ticket at Disneyland, $99 for a one day adult pass. I know I had more fun spending a day with these kids at the park, then if I went to Disneyland.

We get a number of calls each month asking about refinance and I like to start the conversation with asking why and how would this help your financial goals.  It’s good to have financial goals so you can keep focused when it comes to making decisions like refinancing, looking at refinancing as part of a broader financial picture is important.

One more reason for the recent upswing in refinance activity is the reduction in FHA MI rates, many buyers who used FHA loans to purchase over the last 2-3 years are finding they can significant reduce their payment by refinancing, without an appraisal into a lower rate and lower MI rate FHA loan.

Trivia for the month:

Last months question – Triskaidekaphobia is the fear of the number 13.  If you are not afraid perhaps you can think of 2 integers (whole numbers, not fractions) which can be multiplied to yield 13.  Do you know what these numbers are?  (Hint: they are two different numbers.)  Answer: This one was pretty straight forward, if a just a little bit of a trick. The answer is 1 and 13

Today’s Question – Things are sometimes boring at Salcatraz the Federal penitentiary for the criminally inept.  Two long term inmates, Nick and Vince try to fill in the days with contests.  Nick and Vince decide to kill time by flipping a coin for $1 a flip.  Nick won 3 flips but Vince won $5.  How many flips did they have in all?

We are watching home prices rise in most areas. Let’s hope it doesn’t get too crazy, a nice 5-7% annual appreciation would be sustainable. When I pulled these numbers I noticed that the median home size in San Jose is much lower than the Morgan Hill, Gilroy area that I watch a little more carefully these days. About 1,000 sq.ft smaller homes. 


San Jose CA, April 2015

  • 767 homes on the market vs. 643 a year ago
  • 16 median days on market compared to 15 a year ago
  • Median price: $710,000 vs $650,000 a year earlier
  • Median size: 1,538sq. ft.

This includes condo’s and single family homes. Data pulled from Movoto.com


Mortgage rates have wobbled a little up and down over the last month but are essentially flat. It’s interesting to note that the 5/1 ARM product is currently at a 1 year low mark. The forecast remains for flat rates until we see further signs of inflation.


Product Today 1 yr Low  1 yr. High
30 Yr FRM 3.71  3.55  4.43
15 Yr FRM 3.04  2.95  3.50
FHA 30 Year Fixed 3.37  3.25  4.00
Jumbo 30 Year Fixed 3.64  3.57  4.20
5/1 Yr ARM 3.00  3.00  3.25
Updated: 4/24/15