August 9, 2023
Real Estate Market Update - 08/08/2023
Mortgage rates have seen a slight increase as of July 27. The 30-year fixed-rate mortgage now stands at 6.81%, up from last week's 6.78%. Comparatively, this time last year, the rate was significantly lower at 5.30%. Similarly, the 15-year fixed-rate mortgage averaged 6.11%, slightly higher than the previous week's 6.06%. A year ago, it was at 4.58%.
LA and Orange County's real estate market has been bustling with activity in the past two weeks. Our team has successfully listed several new properties that garnered multiple offers, including some all-cash transactions. However, stiff competition has also been evident on the buyer's side.
Notably, the recent Federal Reserve rate hike contributed to the slight increase in mortgage rates. Surprisingly, this hasn't dampened buyers' appetite for purchasing homes.
Low inventory remains a key factor in the market, keeping prices stable. As we move forward, the next few months present an excellent opportunity for sellers to put their houses on the market.
Despite the summer season, our dedicated team is hard at work, assisting clients with both selling and buying in this competitive real estate market. If you're considering buying or selling a property, don't hesitate to reach out to us for expert guidance and support.
What We're Reading
Why it’s so hard to buy a home now?
As you have heard throughout 2023, the real estate market has been tough, especially for buyers. While there are fewer buyers motivated to purchase and that are actively shopping, the number of homes being listed for sale has also dropped significantly from a year ago. It has become frustrating and tiring for buyers wanting to own their first home because prices are high, interest rates remain high and supply is extremely low. It is a trifecta of unfavorable factors working against buyers, as outlined in this article by CNN: "Shopping for a home? There’s a lot working against you right now"
One of the main issues is that current homeowners that have existing mortgages are very reluctant to give up their low 2% to 3% mortgage rates to sell their home and purchase a new home requiring a new loan with a 6% to 7% mortgage rate. These potential sellers are opting to stay put, which is keeping the real estate market stagnant. For these sellers to move, it may take a job relocation or family expansion.. or a "make me move" price to incentive them to move.
The good news is that mortgage rates are expected to drop after the summer. If that holds true, then homes may become more affordable again and can kick the housing market back into higher gear.
Stay up to date on the latest real estate trends.
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