As the Federal Reserve continues to battle inflation by increasing its target interest rate, mortgage interest rates continue their climb. In this November Los Angeles real estate update we take a look at how interest rates are changing, and the impact that it has on the Los Angeles real estate market.
Mortgage Interest Rates Continue To Climb
Concerns over inflation have continued to plague the economy, causing the Fed to continue its aggressive stance on the target interest rate. In mid-October, news broke that inflation continued to increase at a higher-than-expected rate, causing Federal Reserve Chairman Jerome Powell to reaffirm the Fed’s plan to aggressively raise the target interest rate. The result was another spike in mortgage interest rates, putting the rate at over 7% during much of October, and resulting in an average rate of 6.9% for a 30-year fixed rate loan during the month of October.
Information thus far in November indicates that inflation growth is slowing, which has resulted in a drop in mortgage interest rates. We expect to see a slight decline in the average interest rate during the month of November.
Business As Usual For Real Estate Prices
Despite rising interest rates, real estate prices in Los Angeles have continued their seasonal fluctuation, with no indication of a declining market. Prices remain slightly above their level during the same time last year. Although prices are not soaring as they did in 2020 and 2021, prices are continuing to steadily climb year-over-year.
Last month, we predicted a decline in prices due to increasing interest rates, but that prices would remain above where they were the prior year. Our prediction was correct. We expect the same thing next month. A sharp rise in interest rates will typically put downward pressure on the market. Add to that the fact that prices typically decline from October to November, and it is a no-brainer that prices will decline on average in November as compared to October. However, as with last month, we expect prices will continue to remain above last year’s prices at the same time.
If you would like to further discuss our November Los Angeles real estate update, or how Esquire Real Estate Brokerage can help you in the Southern California real estate market, feel free to give us a call at 213-973-9439 or send us an email at email@example.com.