Welcome to my February newsletter, with an update on mortgage rates, the latest jobs and Fed news, and how the Los Angeles market is evolving as we move deeper into 2026.
Mortgage Rates & Fed Outlook
Mortgage Rates
Mortgage rates have stayed in a relatively tight and predictable band to start February, with national 30‑year fixed and jumbo averages hovering around the high‑5s, and 15‑year loans generally in the high‑4s for agency paper loans.
Here is a snapshot of where many of our top‑tier local products are pricing today (for strong‑profile borrowers):
• 5.25% on 7YR jumbo ARMs up to $5M with full income documentation, depending on loan‑to‑value and credit.
• 5.5% on 10YR jumbo ARMs up to $5M with full documentation, again varying by structure and profile.
• Bank‑statement loans for self‑employed borrowers are generally still in the mid 6% range, reflecting the added underwriting complexity but giving buyers flexibility when tax returns don’t tell the whole income story.
ARMs continue to make sense for clients who want flexibility and expect another refinancing opportunity if rates head lower later this year. After three rate cuts in 2025, the Federal Reserve left its benchmark policy rate unchanged at its January 27–28 meeting, keeping the federal funds target range around 3.5% -3.75%, and signaling a shift to “wait‑and‑see” mode.
The Fed’s messaging was straightforward: the economy is growing at a “solid” pace, inflation is still somewhat elevated, and policymakers believe policy is restrictive enough for now, with future moves dependent on incoming data rather than a preset cutting path. That background argues for modest, data‑driven moves in mortgage rates rather than big swings, good news for borrowers and agents trying to plan transactions with less guesswork.
Inflation Numbers and Effect on Mortgage Rates
Today’s U.S. inflation report shows the Consumer Price Index rose 2.4% year-over-year in January 2026, down from 2.7% in December and below economists’ 2.5% forecast. Core CPI, which excludes food and energy, also eased to 2.5%. This much needed cooler-than-expected reading signals easing price pressures from lower gas, food, and shelter costs, bringing inflation closer to the Federal Reserve’s 2% target.
Lower inflation positively impacts interest rates by reducing the urgency for the Fed to maintain elevated benchmark rates (currently 3.50%-3.75%), increasing the likelihood of near-term rate cuts that could ease mortgage and borrowing costs for consumers, including real estate buyers.
Fannie/Freddie MBS Buying & Rate Spreads
The administration’s new plan for Fannie Mae and Freddie Mac to buy up to $200 billion in mortgage‑backed securities (MBS) is intended to boost demand for home‑loan bonds and help keep mortgage rates from drifting higher.
While experts differ on the exact impact, many expect it could trim rates by a few tenths of a percent over time and give lenders a bit more room to sharpen pricing on both conforming and jumbo loans. The bottom line: policy is now leaning toward supporting housing and credit, so the smart move is to focus on choosing the right loan structure, not trying to perfectly time the bottom in rates.
Latest Jobs Report
The U.S. jobs report released this week (a week late) showed payrolls rising by about 130,000, the strongest monthly gain in more than a year and a clear improvement over the very soft hiring pace of 2025. The unemployment rate edged down to 4.3%, and wage growth came in around a 3.7% annual pace – moderate by recent standards and broadly consistent with gradual disinflation rather than a fresh inflation spike.
This “slow‑healing” labor market is close to what the Fed wants to see: enough job creation to avoid a hard landing, but not so much heat that it forces policymakers back into aggressive tightening. For mortgage borrowers, that combination tends to support a stable‑to‑slightly‑lower rate backdrop over time, especially if incoming inflation data continues to move in the right direction.
Los Angeles Market: More Balance, Not a Freeze
The latest Los Angeles housing data points to a market that has cooled from peak pricing but is far from distressed: January 2026 estimates show a citywide median of about $975,000 (down roughly 9% year‑over‑year) and a countywide median near $879,000 (off less than 1%).
Homes are taking longer to sell, around 80 days on market in the city versus about 69 a year ago, and roughly 69 days countywide versus about 60 – but city closed sales have inched higher (just over 1,100 deals versus about 1,080 a year earlier), signaling that well‑priced, well‑presented listings still move.
Inventory has eased from the ultra‑tight conditions of recent years, giving buyers more real choices across price bands, yet trophy and turnkey homes in premium neighborhoods continue to attract strong interest and, when priced correctly, can still draw multiple offers.
Recent Closed Loans by Cohen Financial Group
Home Purchase | Los Angeles | $3.4M
85% LTV Financing
30YR fixed, 10YR interest-only loan
6.875% interest rate | 7% APR
A high-leverage, self-employed borrower who did not qualify using tax returns secured financing by qualifying with bank statements instead. With strong underlying income, we structured the deal and closed in just 17 days.
Cash Out Refinance | West LA | $3M
75% LTV Financing
Bank Statement Loan
6.75% interest rate | 6.85% APR
We completed a $3M all-cash-out refinance using only bank statements with no tax returns required. The loan closed in just three weeks, providing the most cost-effective financing solution to support the borrower’s company expansion.
Second Home Purchase | Newport Beach | $1.6M
80% LTV financing
7YR ARM loan
5.375% interest rate | 5.5% APR
We secured financing for a high-leverage borrower purchasing a second-home condo despite complex tax returns and multiple property holdings. Careful structuring and precise underwriting made the deal possible.
Home Purchase | Santa Monica | $6.7M
80% LTV financing
30YR fixed rate loan, 10YR interest-only
5.375% interest rate | 5.5% APR
With full income documentation and precise execution, we closed in 21 days and protected the borrower from significant deadline penalties.
Doctor’s Loan | Mar Vista | $3.050M
Cash-out refinance
5.75% interest rate | 5.875% APR
The borrower secured $4M in cash through a $6M refinance and closed in 30 days.
Refinance | Palos Verdes | $6M
90% LTV financing
10YR ARM loan
5.75% interest rate | 5.875% APR
Even without a history of income as a new medical group partner, and with significant student loan obligations, this borrower secured high-leverage financing in Mar Vista through careful income analysis and smart structuring.
Dr’s Loan | Mar Vista | $3.050M
Key Housing & Policy Dates This Month
For clients and agents watching the calendar, several February dates will help shape the housing market conversation:
February 18 – Building Permits and Housing Starts
February 20 – New Home Sales
As we move through February 2026, the combination of a cooler but stabilizing labor market, a Fed that has shifted from “hiking” to “holding,” and targeted support for mortgage credit via the new Fannie/Freddie MBS authority creates a constructive backdrop for both purchases and refinances. For buyers, that means more negotiating power and more inventory than they had a year or two ago; for existing owners, it means real opportunities to revisit higher‑rate loans from the 2022–2023 period and explore rate‑and‑term or cash‑out strategies.
If you’d like customized rate quotes, scenario analysis for a specific property, or a straightforward conversation about how these developments affect your plans or your clients’ decisions, please reach out any time.
Warm regards,
Mark Cohen