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Laura and Anthony Salvato wanted to buy a home in Santa Rosa before their 4-year-old daughter started kindergarten.

However, the couple didn’t know what they could afford during a time of rising interest rates and home prices. The jump in prices was linked to a housing shortage exacerbated by last fall’s devastating North Bay wildfires.

“Is this like the worst time to be looking?” Laura Salvato recalled asking herself.

However, less than two months after finding a real estate agent and a lender, the couple completed the purchase of a house in Rincon Valley. The Salvatos, who are in their early 30s, moved in with their two young daughters in late June.

The three-bedroom, two-bath home comes with a $3,900 monthly payment, including almost $400 for mortgage insurance, a requirement with FHA loans. The payment is substantial, Laura Salvato acknowledged, but rents for similar houses also have grown costly in Sonoma County.

Buying the home allowed the couple to fix their housing costs and provide a way for 4-year-old Grace and 22-month-old Emma to eventually “grow up in one school.”

“I just wanted to get in while we could afford it,” their mother said.

Home prices and mortgage interest rates have risen for the past two years without much noticeable impact on the Sonoma County housing market.

But real estate agents and lenders maintain that in the past few months the market has shifted, with more homes available for sale and more sellers forced to cut prices to attract buyers. Those changes may have helped the Salvatos quickly find and purchase a home, according to their lender and real estate agent.

The shifting conditions appear to provide not only opportunities but also challenges. Sellers are facing headwinds on pricing, and many buyers nonetheless find the monthly cost of owning a home has jumped significantly.

Frank Nothaft, chief economist for Irvine-based data service CoreLogic, estimated that prices for entry-level houses in California have risen about 10 percent over the past year. When factoring in the increase in mortgage rates, he said, the monthly loan payment for buying the same home in theory would have jumped about 20 percent in 12 months.

“That just underscores the challenges for an entry-level home buyer in this market,” Nothaft said.

And mortgage rates are expected to slowly keep rising. CoreLogic predicts that by the end of 2019, the rates will climb about a half percent to 5.1 percent.

“That would be the highest mortgage rates in a decade,” Nothaft said.

Last week, the average interest rate in the U.S. for a 30-year fixed mortgage rose to 4.6 percent, according to the federal government-sponsored enterprise Freddie Mac. The rate has climbed more than a half-percentage point in the past year and more than 1 percent since August 2016, when it was 3.44 percent, among the lowest mortgage rates of the last 40 years. Rising rates don’t just make it harder for first-time buyers to qualify for mortgages. The higher cost of borrowing also is curtailing the loan refinance business and causing more homeowners to hold onto their properties rather than sell and give up low-rate loans.

In the past decade, the county’s housing market has weathered a historic crash in home prices and the most destructive wildfire in state history.

During the housing crash, the county’s median sales price was cut in half, hitting a low of $305,000 for a single-family home in February 2009.

In the October fires, nearly 5,300 homes burned in the county.

The median price has risen for the past six years. That period has been noteworthy for limited inventory and is generally viewed as a sellers’ market.

After the wildfires, those who lost homes scrambled to locate and sometimes buy alternate housing. By June, the county’s median price had climbed to a record $705,000, an increase of 13 percent from a year earlier.

During the years following the housing crash, real estate experts nationally credited historically low mortgage rates with helping bring buyers back into the market. Now rates are rising, but few local brokers and agents have suggested that the higher cost of borrowing has hindered sales.

Home purchases have been “driven by bigger life issues than the difference of 1 percent in a mortgage,” said Brian Connell, managing broker of the Santa Rosa Mission office of Coldwell Banker.

Still, Connell said, in the past few months some of the frantic activity sparked by the wildfires “has sort of played itself out.” Looking forward, he said, buyers likely will have more leverage in negotiations and home prices may appreciate at a slower pace.

Others also spoke of changed conditions.

“I’m telling people now that there is absolutely a softening in the market,” said Scott Sheldon, branch manager with New American Funding, in Santa Rosa. For those with the means, “it’s getting easier to buy a house today.”

Sheldon was the Salvatos’ lender, and he points to the couple’s home-buying experience as evidence of his belief.

The Salvatos looked at only about five homes, and the first offer for their Estes Drive house was quickly accepted by the owner, Laura Salvato said.

The couple’s early success stands in stark contrast to the hordes of first-time buyers who over the past eight years regularly found themselves outbid by wealthier buyers. Sometimes the winning buyers offered more money. But they also won bids simply by paying cash or making larger down payments with proceeds from the sales of other properties.

Sheldon acknowledged the Salvatos’ experience was unusual for first-time buyers. Part of the reason could be when they began house hunting.

“They hit it at the most opportune time,” he said. “They bought right as the softening commenced.”

While brokers haven’t cited interest rates as a significant factor in the market, they have noted that home prices are increasingly beyond the reach of most county residents.

Only 21 percent of county households could afford the median-priced home in the year’s first quarter, according to the California Association of Realtors. In contrast, 51 percent could do so at the end of 2011, but only 7 percent in the last half of 2005, when prices peaked before the housing crash.

For the median-priced home of $705,000, a typical conventional buyer would need to provide $141,000 for a down payment, plus $11,000 in closing costs, Sheldon calculated. With a 5 percent loan, the monthly payment, including taxes and insurance, would be $3,832, and the buyers would need an annual income of $92,400.

With an FHA loan, the buyer for the same house would pay $57,000 for a down payment and $11,000 in closing costs. At 5 percent, the monthly payment would be $4,805 and the minimum annual income would be $115,000 a year.

Higher interest rates play a role in determining how affordable homes are. Also, the increased borrowing costs has caused a decline in the home lending business.

“All California is experiencing a slowdown,” said Otto Kobler, branch manager in Santa Rosa of Summit Funding.

The most dramatic impact of rising rates occurs in the lending business for those who want to refinance their homes.

“It just vaporizes,” Kobler said.

Higher mortgage rates also make homeowners think twice before selling.

Half of the nation’s homeowners with mortgages have an interest rate of no more than 3.75 percent, CoreLogic found in the year’s first quarter.

Nothaft, the CoreLogic economist, predicted that many of those owners will stay put and improve their current homes rather than sell and give up “a really cheap mortgage rate.”

For would-be buyers, agents and brokers recommend starting out by finding a lender and getting approved for a loan amount.

“Literally that is the first step,” said Mark Altes, a broker associate at Sotheby’s International Realty in Sonoma who represented the Salvatos. Those who instead go out and find a home they like “can’t even write an offer on it because they don’t know what they’re approved at.”

Laura Salvato works part-time as a bank customer service representative. Her husband. Anthony, is a foreman for a construction company that specializes in hospital remodeling.

She called it worthwhile for the couple to begin their conversations with Altes and Sheldon. Starting out, they didn’t know whether they could locate and afford a suitable home, but they were determined to find out.

“My whole family’s here,” she said. “His whole family’s here. … We knew we wanted to plant our roots here.”

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.

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