As we approach the end of 2024, the real estate landscape in Los Angeles County is shaped by the interplay of interest rates, home prices, and affordability. Here’s an overview of current trends and projections for the next 60 to 90 days.

Current Mortgage Rates

As of December 5, 2024, the average interest rates for Los Angeles County are:

• 30-year fixed-rate mortgage: Approximately 6.81%

• 15-year fixed-rate mortgage: Approximately 6.10%

These rates have seen slight fluctuations in recent months, influenced by economic indicators and Federal Reserve policies.

Home Prices in Los Angeles County

The housing market remains robust, with home prices continuing to rise:

• Median sale price: $900,000 in October 2024, a 2.3% increase compared to October 2023

• Median price per square foot: $598, up 2.7% year-over-year

This upward trend reflects sustained demand amid limited housing inventory.

Affordability Challenges

The combination of elevated home prices and higher mortgage rates has impacted affordability:

• Monthly mortgage payments: Increased due to higher interest rates and home prices

• First-time buyers: Facing challenges entering the market, with only 24% of home purchases between July 2023 and June 2024 made by first-time buyers, a historic low

Market Projections for the Next 60-90 Days

• Interest Rates: Expected to remain relatively stable, with potential slight decreases if the Federal Reserve implements anticipated rate cuts. However, economic policies and inflation trends could influence these rates.

• Home Prices: Likely to continue their gradual ascent, driven by persistent demand and constrained supply.

• Affordability: May improve modestly if interest rates decline, but high home prices will continue to pose challenges for many buyers.

Strategies for Prospective Buyers

• Mortgage Rate Locks: Consider locking in current rates to mitigate the risk of future increases.

• Negotiation: Explore negotiating mortgage rates with lenders or purchasing points to secure lower rates.

• Market Timing: Stay informed about Federal Reserve announcements and economic indicators that could affect mortgage rates and housing affordability.

In summary, while the Los Angeles County housing market remains dynamic, prospective buyers should stay informed and adopt strategic approaches to navigate the evolving landscape.