Window for low mortgage rates set to close

Many analysts are predicting the Federal Reserve could raise rates as early as next month. If it does, the new rates could have an outsized impact in Southern California, where home prices are higher than in many other parts of the country.

A rise in interest rates would mean bigger mortgage payments, and that may affect anyone who needs to get a loan, according to Ziggy Zicarelli, president-elect of the California Association of Realtors.

"Obviously, the potential for qualifying is more difficult if the interest rates are higher," Zicarelli said.

Interest rates have been at historic lows as the Fed waits for the economy to improve. A solid July jobs report is just the latest indicator that the Fed may act soon.

"The unemployment rate remains low and there are some signs that wages are again picking up in July," said Michael Fratantoni, chief economist of the Mortgage Bankers Association.

Fratantoni and other analysts predict the Fed will raise rates at its meeting next month. That's not a lot of time for someone to lock in a house at current interest rates. But for someone who already has a lead on the house, it may be the extra push to make a bid, Fratantoni said.

Still, Zicarelli predicts higher interest rates won’t dampen the broader real estate market in Southern California. He said people who want a bigger house or need to move for a job will do so anyway.