Rising Mortgage Rates Slow LA Housing Market as Affordability Drops

Mortgage rates in LA have risen from 3.5% to 7.1% since 2020, causing a surge in monthly payments and drop in affordability.

LA home sales fell 37% in the past year as prices hit record highs. Historically, falling rates only modestly boost sales while surging rates lower sales.

Cheaper financing often means softer pricing. When LA rates fell the most, home prices rose only 1.6% vs 7.6% when rates surged.

Jobs are key - rates usually fall when the economy is weak, not the best time for major purchases.

Nationally and in SoCal, price gains were weaker when rates fell vs when they rose. History suggests lower rates may not drive a surge in demand.