Welcome to my October newsletter, featuring the latest mortgage rate updates, key economic insights, and a focused look at the current Los Angeles housing market.
Mortgage Rate Update & Fed Outlook
Mortgage Rates
The bond market (which is closely tied to mortgage interest rates) is signaling confidence because investors broadly expect another rate cut this month, with growing odds of further reductions before year-end. Sentiment is more positive than it has been in several years, thanks to a cooling job market and expectations for cooling inflation in the near term.
Mortgage rates have not fluctuated too much over the last two weeks. For agency conforming loans up to $806,500, rates are currently holding in the 5.625% – 5.875% range, their lowest point since early 2023. Jumbo rates are running a quarter to three-eighths higher, while adjustable-rate mortgages (ARMs) remain competitive. These products continue to offer strong near-term flexibility for LA buyers.
Here’s a snapshot of current rates on our top local loan products:
• 5.125% on 7YR jumbo ARMs up to $5M with verified income documentation, banking relationship required.
• 5.25% on 10YR jumbo ARMs up to $5M with verified income documentation, banking relationship required.
• Bank statement loan rates vary from the mid to 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.
This news is positive for Los Angeles home buyers. With both softer housing prices and lower financing costs, it’s a rare window where the numbers work in your favor on both sides.
Federal Reserve Policy & Interest Rate Outlook
Futures markets are now pricing in nearly a 90% probability of a second, quarter-point cut at the Fed’s next meeting on October 28–29. Analysts see a high likelihood of further action before year-end if job growth continues to stall or if the unemployment rate rises further.
Despite the inflation risk, the Fed’s focus has clearly tilted toward supporting the job market and ensuring a soft landing as economic growth slows. With wage growth and hiring both cooling, the Committee’s next steps will be data-dependent, but policy is now clearly in an easing cycle.
Jobs Report
Due to the government shutdown, the official U.S. jobs report was not released as scheduled.
Instead, we’re relying on the latest ADP employment data for September, which showed a decline of 32,000 private-sector jobs, marking the largest drop since early 2023. August payrolls were also revised down, now showing a slight loss. Pay growth for job-stayers remains steady at 4.5% year-over-year, while pay gains for job-changers fell to 6.6% from 7.1% last month. The ADP report signals that hiring momentum continues to slip, adding further pressure on the Fed to move forward with rate cuts.
Local Activity & Recent Transactions
Local Activity
According to Realtor.com September data, median home list prices for the greater Los Angeles area remain stable, hovering around $1 million, with only a 2% decrease year-over-year.
Demand has picked up slightly, as lower mortgage rates have prompted a jump in purchase applications, while inventory is trending up: active listings rose by about 24% year-over-year, although still down from pre-pandemic levels. Median days on market now stands at 11, which is still highly competitive for buyers.
Overall, I’m hearing the higher end of the market is challenging, but well priced listings in prime areas are still moving quickly with multiple offers. This is still a sellers market in most areas, so buyers who are financing and want to compete against cash offers have to submit with a pre-approval or even better, a statement from a lender showing they are fully underwritten for the purchase amount.
Recent Closed Loans
These recent transactions highlight my ability to deliver fast, seamless closings, often securing rates and terms that set the bar in today’s market.
New Home Purchase | Mid-Wilshire | $3.25M
80% LTV Financing
7/1 ARM
5.25% interest rate | 5.375% APR
Closed in 30 days
We structured the deal by obtaining a HELOC from the borrower’s home, allowing access to a large portion of the down payment while still securing prime rates.
New Home Purchase | Encino | $2.995M
60% LTV financing
30-YR fixed-rate loan
12-month bank statements
6.125% interest rate | 6.275% APR
This borrower secured low loan-to-value financing paired with a competitive low rate. He won the home because we were able to close in just 15 days
New Home Purchase | Arcadia | $4.35M
80% LTV Financing
7-YR interest-only loan
6.99% interest rate | 7.07% APR
12-month bank statements
Few banks would touch this loan amount with a highly leveraged borrower, but we secured approval with a bank statement program and delivered a 30-day close.
New Home Purchase | Sherman Oaks | $3.5M
85% LTV Financing
Bank statement loan
7/1-YR ARM interest-only
6.99% interest rate | 7.1% APR
Closed in 21 days
Even with a highly leveraged financial profile and a tight timeline, we secured a loan for this home buyer using only 12 months of bank statements, no tax returns.
National Housing & Economic Reports to Look for in October:
October 17: Building Permits and Housing Starts
October 23: Existing Home Sales Data
October 24: New Home Sales Data
October 29: Fed Interest Rate Decision
Whether you’re exploring your options or ready to make a move, the opportunities in today’s market are real, and with the right guidance, you can make the most of them..
Reach out to me for a straightforward conversation and expert advice tailored to your goals.
Mark Cohen