Welcome to my December newsletter, wrapping up the year with a look at where mortgage rates stand, what the Fed’s latest move means for borrowers, and how the Los Angeles market is setting up as we head into 2026.
Mortgage Rate Update & Fed Outlook
Mortgage Rates
Rates have finally settled into a comfortable zone. Conforming fixed-rate loans in Los Angeles are sitting in the high 5% to just under 6% range, which is still among the lowest we’ve seen since early 2023. Jumbo loans are in the high 5’s as well, and adjustable-rate mortgages continue to make sense for clients who want flexibility, especially if they plan to refinance again down the road.
Here’s a snapshot of current rates on our top local loan products:
• 5.25% on 7YR jumbo ARMs up to $5M with verified income documentation.
• 5.50% on 10YR jumbo ARMs up to $5M with verified income documentation.
• Bank statement loan rates vary from the mid 6% to high 6% range, depending on loan-to-value (LTV) ratios and creditworthiness. These loans are designed for self-employed people who can’t document their income with tax returns.
Federal Reserve Policy & Interest Rate Outlook
The Federal Reserve’s December 9-10 FOMC meeting commands attention, with markets assigning an 87% probability to a 25 basis point reduction, the third cut of 2025. Economists at firms including Goldman Sachs anticipate this adjustment will sustain the soft landing trajectory without excessive stimulus. The bond market is already pricing in a cut so I do not anticipate any big changes in rates next week.
Jobs Report
The Bureau of Labor Statistics has not published data since September due to the federal government shutdown. The next release will be on December 16th. Analysts have been relying on alternative reporting to gauge current labor market conditions and the data is mixed. November private-sector payrolls declined by 32,000 according to ADP data, though Chicago Fed estimates hold the unemployment rate steady at 4.4%. Wage growth remains controlled, and new unemployment filings have dropped in many states including California. The December 16th report should help settle the debate on whether the labor market has stabilized or is potentially driving the economy in a less positive direction.
Local Activity & Recent Transactions
Local Activity
The latest available data (October) demonstrates stability in the Los Angeles market. Redfin reports a citywide median sales price of $1.0 million (down 1.9% year-over-year) and a countywide median of $905,000 (up 0.6%). Inventory levels have increased modestly, aligning with national gains exceeding 11%, which affords buyers greater selection amid subdued sales volume. Median days on market extended to 62 days overall (up 17%), though, as I mentioned last month, well-priced properties in premium areas such as the Westside continue to transact within two weeks.
Recent Closed Loans
New Home Purchase | Westside | $19.95M
75% LTV Financing
7/1 Interest-only ARM
5.52% interest rate | 5.62% APR
$14.96M loan
We secured an interest-only loan for a highly leveraged borrower by going up to 75% LTV, possible through our long-standing relationship with the bank. The client tried several other Wall Street banks, but no one came close to the terms we offered.
New Home Purchase | Santa Monica | $3M
90% LTV Financing
10YR ARM
5.61% interest rate | 5.71% APR
We secured 90% LTV financing with no PMI for a highly leveraged doctor through a specialized Doctor program, making a complex purchase simple and affordable.
New Home Purchase | West LA | $1.5M
95% LTV Financing
7 YR ARM
5.67% interest rate | 5.77% APR
Our Doctor program made this a smooth approval: fast turnaround, no impounds, no PMI, and just three months of reserves—an exceptional advantage for physician clients.
Cash-Out Refinance | West LA | $2M
2-week close!
70% LTV Financing
$2M cash out
Interest-only loan | no tax returns
6.75% interest rate | 6.86% APR
The borrower needed funds to purchase a property on the East Coast, but the deal was complicated by vesting issues from a prior refinance. We structured a solution that cleared the title hurdles and delivered the cash they needed on time.
National Housing & Economic Reports to Look for in December:
December 10: Fed interest rate decision
December 19: Existing Home Sales
As 2025 concludes, thank you for your continued confidence in Cohen Financial Group. We value the opportunity to provide clear guidance amid market uncertainty and remain dedicated to your success in 2026. For rate quotes, scenario analysis, or strategic discussions, please contact us at any time.
Warm regards,
Mark Cohen