REAL ESTATE NEWS (Los Angeles, CA) — Looking at the real background of today’s crashing real estate market, how should we determine when might be the best time to purchase a loft, condo or house? As interest rates go up and the housing market falters, many Angelenos are today delaying, putting off a home search until they feel the market hits a low point.
Deciding when to buy a house is one of the biggest financial decisions that most people ever make. Not only is it an enormous financial decision, it’s also an extremely emotional choice. Anyone who has put in an offer, gone through a bidding war, then lost a home — or who got their dream home — would agree that the process can have extreme highs and lows.
The last several years have been increasingly confusing to potential home buyers. Virus hysteria hit us with tremendous fear, and created massive anxiety about the future of the economy. The initial panic spurred home buyers to put a pause on purchases. Eventually, lockdowns, remote work and remote learning inspired many to seek additional space. That, coupled with what was a low-interest-rate environment and low inventory, spurred bidding wars, sending home prices soaring.
Now that the Federal Reserve is hiking interest rates, with more increases anticipated in the coming months, there is upward pressure on mortgage rates. The average rate on 30-year mortgages has recently risen above 7%. This is more than double what rates were toward the end of last year. With higher borrowing costs, the Mortgage Bankers Association has reported that mortgage demand is 86% lower than it was last year. They anticipate slowing housing demand for 2023.
Now, there are fewer bidding wars, and we are seeing more price drops. Downtown Los Angeles home prices fell significantly last month as compared to the same month last year. With all of this financial havoc, many are asking if now is the right time to buy a home. The answer really depends on one’s needs and current financial position.
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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker CalDRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.