Housing Market Update: Rates, Prices, and 2025 Trends You Need to Know


Mortgage Rates Hit 7%: What’s Next 

The HousingWire reports that the average 30-year mortgage rate climbed to 7.02% this week, marking what many professionals now consider the "new normal." Industry forecasts suggest rates may stabilize between 5.75% and 7.25% in 2025, offering a narrower range of fluctuations compared to recent years. While rising rates pose affordability challenges, buyers can still find opportunities to navigate the market strategically.
 

LA Home Prices See 7% Growth Despite Rising Mortgage Rates

The median price for a single-family home in Los Angeles County rose from $893,650 in October 2023 to $956,210 in October 2024, a 7% year-over-year increase. This growth demonstrates the resilience of the Los Angeles housing market, despite rising mortgage rates. The sustained demand reflects the city’s strong appeal, although buyers are now facing higher costs than they were a year ago. You can explore more about these trends through the California Association of Realtors and Los Angeles Almanac.
 

Steady Growth Predicted for the Housing Market in 2025

📈 2025 Housing Forecasts: Industry experts anticipate continued growth in home prices across the nation.

  • Goldman Sachs: +4.4%

  • HousingWire: +3.5%

  • Wells Fargo: +4.3%

  • Zillow: +2.3%

These forecasts suggest a steady upward trend for home values, reflecting sustained demand despite affordability concerns. With low inventory and less competition, demand for properly marketed properties remains strong. However, listings with poor pricing or subpar presentation can become stale, creating unique opportunities for savvy buyers. Buyers and sellers alike should prepare for a competitive market heading into the new year.

 

Key Points

  • 📈 Rate Update: As of this morning, the average 30-year conforming rate is at 6.95%, while 15-year rates remain steady at 6.37%. Check the latest rate quotes at Mortgage News Daily for updates.

  • 📊 Conforming Loan Limits: For Los Angeles County, the 2025 conforming loan limit for single-family homes is $1,209,750, offering greater borrowing potential in this high-cost region.

  • 🌟 Opportunities: Buyers should target motivated sellers with properties lingering on the market or poorly marketed listings, which can offer room for negotiation.

  • 🎁 Holiday Advantage: Shopping during the holidays often means less competition, allowing buyers to negotiate better deals and secure favorable terms.  Check out my video here on the 4 reasons to buy during the holidays.

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REVIEWS

What is a comp?

What is considered a comp?

  • A true comp is a home that is comparable in square footage, bedroom/bathroom count, lot size, style of home and the list goes on.

How many comps should you look at?

  • Really as many as you want but I typically look at 5 - 10 comps when analyzing a property. Sometimes you need to look at more comps to paint the true picture of what’s going on.

How far back in time should you look?

  • 3 months is ideal but you can go back 6 months. If you go back any further we are looking at a different real estate market and have to make adjustments for time

How far should you look from the property you’re interested in?

  • The closer you are to the house you’re bidding on the better. I typically like to look within 1/2 mile to 1 mile. It’s OK to include a larger area to look within but always consider how it compares to the street and neighborhood of the house you’re bidding on is in.

Other key factors?

  • Average Days on Market

  • Median / Average Price Per Foot

  • Historical Graphs to determine future appreciation

  • % LP/SP (Typically what percentage of list price does the property end up selling at)

  • Active Comps - You need to see how other active listings are performing

  • Historical list history of subject property

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My CNN Interview on LA Real Estate

My CNN Interview on LA Real Estate


My CNN Interview on LA Real Estate


I’m thrilled to share that I was recently interviewed by CNN to discuss the state of the housing market in 2024. The article dives into how the market has slowed dramatically, particularly in Los Angeles, which has seen the lowest turnover among major metro areas. Several factors are at play here, including changes in the entertainment industry, elevated interest rates, and homeowners hesitant to sell due to their locked-in low mortgage rates. Housing affordability is at an all-time low, especially for first-time home buyers entering the market, as wages have not kept pace with home prices, making it increasingly difficult for many potential buyers. 


Here are some of the main factors affecting the LA housing market:
 

  • Entertainment Industry Slowdown: Streaming service models and lasting impacts from industry strikes have significantly slowed content creation, impacting employment in LA.

  • "Lock-in Effect": Homeowners with low mortgage rates are reluctant to sell, reducing available inventory.

  • High Interest Rates: Elevated mortgage rates are deterring potential buyers, further slowing the market.

  • Inflation Impact: With rising costs across the board, many buyers are feeling the pinch, as high inflation makes it harder to save for a home and manage expenses.

  • Election Uncertainty: The upcoming election is adding to market hesitation, as political uncertainty often causes buyers and sellers to wait before making big decisions.

  • Affordability at an All-Time Low: First-time buyers are struggling as wages haven’t kept pace with home prices, making it harder to enter the market.
     

My Take

In my experience, the LA market isn’t entirely slowing. I’m still dealing with homes that receive multiple offers and sell within 1 to 2 weeks, especially in certain areas and price points. While the market is slower than normal, with low inventory and reduced demand, it’s more flat than collapsing. One of the key factors to watch is interest rates. If rates continue to fall, we could see a significant shift in buyer activity, as many who have been waiting on the sidelines may finally re-enter the market. Lower interest rates would make homes more affordable, which could drive demand and lead to a resurgence in sales. Next year could be a pivotal moment for the market, as falling rates may create the perfect opportunity for buyers to jump back in. However, the fate of the entertainment industry remains an important factor, especially for the local LA market.

 

Buying or Selling?
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Jeremiah Vancans
Real Estate Agent
Vancans Group | Compass
jeremiah@vancansgroup.com
vancansgroup.com
310-363-1416
DRE: 01944484
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Buying a property can seem like a daunting task.  We take the stress out of the transaction, streamline the search and negotiate you the best possible price. It’s more than just the search, it’s also about protecting you every step of the way in one of the largest financial decisions of your life.

EDUCATING YOU ON THE PROCESS

We start by educating you on the entire process of buying a property. This starts with recommending you to the best lenders and curating your search for both on and off-market properties. Once we find your home we educate you on the true market value and negotiate you the best possible price/terms. When in escrow we walk you through the contract and minimiize any risks to you. We refer you to the best inspectors and contractors so you can understand the faults of your property as well as costs to fix. We are there every step of the way!

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NEGOTIATING YOUR PURCHASE PRICE

A list price and sale price are two different things. Sometimes houses sell for well above or below the list price. We take the guesswork out of this for you! We provide you with an in-depth analysis of recent sales comparables in the immediate area. This will give you an accurate picture of your property's true market value. From there we can advise you on the best offer price and terms.

CONTRACT NEGOTIATION

In a highly competitive market there are ways to negotiate against multiple offers and beat all-cash offers.  We know all the tricks to beat out multiple offers, get your offer accepted and minimize any risks to you.

INSPECTIONS

We recommend the best inspectors and contractors in town to look at every aspect of the property.  This involves a general inspector, sewer, termite, foundation, chimney and the list goes on! Coming from a legacy of builders in our family, we know good construction and craftsmanship.  We review all inspections and point out any faults and costs associated with fixing up your property. We can then go back to the seller with these issues and re-negotiate the price to get you an even better deal!

ESCROW

The Escrow process can be tricky to navigate and stressful.  We will walk you through the entire process and communicate each and every step.  This involves working within all of your contingency timelines so you’re not in breach of contract. Escrows can run 15 to 30 days and this time goes by fast. We need to fully inspect your home, get bids on any issues that come up, appraise the value, review disclosures and make sure your loan is approved. From inspecting the property to closing the deal we have your back!

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