Los Angeles Real Estate Market Update - MARCH / APRIL 2022
MARCH / APRIL 2022
Rate Hikes - As expected, the Federal Reserve raised its federal-funds rate in the second week of March for the first time in more than three year and signaled more rate hikes to follow for the rest of the year. The move, along with the narrative, prompted interest rates to climb, with the average 30-year fixed rate mortgage surging above 4% for the first time since May 2019 to 4.42% according to the latest weekly Freddie Mac’s survey. The jump was more than a quarter of a percent from the week before (week of March 21st).
Home Buying - Despite recent rate increases, the latest housing report suggests that the market is still strong, and the momentum could continue in 2022. With new and existing housing supply expected to improve in the near term, California will likely experience a solid homebuying season in the upcoming months. Although economists predict home-price growth will start to slow in the coming months.
Prices Softening - There are early indicators that the market is turning, and we expect the softening to become more apparent in the coming weeks. Some agents say they’re starting to see some sellers put their homes up for sale earlier than planned because they’re worried they’ll miss out on the market’s peak if they wait. Along with that, declines in searches, touring, and mortgage applications are larger in California than elsewhere.
Millennials & Baby Boomers - According to National Association of Realtors (NAR), the latest home buyers and sellers generational trends report, the Millennials bloc, now aged 23 to 41, are accounting for more transactions than any other age group (43% of home sales, up from 37% the year prior). While Baby Boomers made up largest share of home Sellers at 42%, the share of Millennial sellers is on the rise increasing 4% points over last year to 26% of all home sellers.
- Sources: California Association of Realtors & Redfin