Gearing Up for the Start of Summer

May 18, 2023

 Gearing Up for the Start of Summer

Gearing Up for the Start of Summer

The recent rate hikes by the Federal Reserve have had a noticeable impact on mortgage rates. As interest rates rise, mortgage rates tend to follow suit, making it more expensive for homebuyers to finance their purchases.

Unfortunately, mortgage rates have more than doubled since the Federal Reserve first raised interest rates more than a year ago to tame inflation, but that did not stop the Fed from raising the interest rate again two weeks ago. In fact, the latest quarter percentage point hike took the Fed-funds rate to a target range of 5%- 5.25%, its highest since 2007 causing yet again an uptick in mortgage rates. Despite rate changes however, we have surprisingly noticed that it has yet to make a significant impact on demand in the Los Angeles and Orange County Housing Market. In fact, homes are still fetching multiple offers with quick closes, many of which are less than 30 days.

Despite rate hikes and market volatility, our team is consistently closing transactions very quickly in a range of price points. As we approach the summer months, our team is preparing for a busy season of showcasing some amazing properties. For all your real estate needs or questions, we are here to serve you.

Why Is It So Hard To Buy A House?

The laws of supply and demand play a major factor in the real estate market. Right now there is a substantially low amount of housing inventory available. Fewer and fewer homeowners are electing to sell their homes. One of the major reasons for this is because a majority of homeowners refinanced and locked into historically low mortgage rates during the last 3 years. For someone to sell their home, they are looking at giving up their ultra-low mortgage rate and having to spend a lot more money on their replacement home.

The good news is that mortgage rates appear to have peaked (in November of 2022). They have dropped during 7 of the last 9 weeks, from 6.73% in March down to 6.35% this past week. Also, as we move into the summer months, more owners will naturally be selling their homes since it is easier logistically once the school year is over. More families typically put their homes on the market during June, July and August; additionally, there will always be residents moving out of state — to be closer to family, for job relocations, retirement, downsizing and/or tax benefits.

While there are fewer listings currently than in previous years (see this Real Trends article "From ice bath to blood bath: California struggles with inventory"), we have been helping a lot of buyers this year find and settle into new homes.  A good percentage of our transactions are happening off-market and are a result of our large network of homeowners and our close relationships with other agents. If you have a specific need and location, let us know how we can help you to find your perfect home before others catch wind of it!

Read Our May Newsletter Here

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