Welcome to my September newsletter, where I bring you the latest mortgage rate trends, economic updates, and insights on the Los Angeles housing market.
Mortgage Rate Update & Fed Outlook
Mortgage Rates
Mortgage rates have continued their downward drift into this month, with 30‑year agency conforming loans up to $806,500 now holding in the 5.625%–5.875% range, while jumbo loans are a quarter to three-eighths higher. These rates are at their lowest levels since early 2023.
Adjustable‑rate mortgages (ARMs) remain even more competitive, with well‑priced options beginning at 5.125% for jumbo loans. These offer an appealing alternative for LA buyers seeking near‑term flexibility.
The bond market is strongly anticipating a rate cut this month, with a high probability of additional cuts before the end of the year. This is the most positive sentiment seen in several years, driven by a slowing job market and expectations of lower inflation in the near term.
Note to Buyers: With both softer housing prices and lower financing costs, this is the rare window where both sides of the equation are working in your favor.
Here’s a snapshot of current rates on our top 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 6% to high 6% range, depending on loan-to-value (LTV) ratios and creditworthiness.
Federal Reserve Policy & Interest Rate Outlook
All signs are pointing toward the Fed cutting rates at the September 17–18 meeting. Markets are currently pricing in a 100% probability of a 25‑basis‑point cut, with many analysts expecting the Fed to follow with a second or third cut before the end of the year if the labor market continues to cool.
While inflation remains slightly above the 2.0% target, the latest CPI report confirmed a moderation trend, headline inflation at 2.7% year‑over‑year, with core inflation ticking up to 3.1%, reflecting ongoing price pressures in sectors like shelter and services.
The Fed’s focus has clearly shifted from inflation containment to ensuring a soft landing amid slowing job creation and a climbing unemployment rate.
Jobs Report
The August jobs report surprised to the downside:
• Nonfarm payrolls: +22,000 (vs. ~150,000 expected)
• Unemployment rate: 4.3%, up from 4.2% in July
• Wage growth: Slowed to 3.5% year‑over‑year, down from 3.7% in July
While there were lots of exaggerated media headlines yesterday, the data is not alarming; it simply adds to a picture of a labor market that’s gradually loosening. This is precisely the signal the Fed needed to justify easing rates.
California Labor Market: The latest state data shows 15,000 new jobs and unemployment ticking up to 5.5% (vs. 5.4% in June). Key growth sectors like health care and leisure continue to add jobs, but tech and logistics have pulled back. Despite the softer trend, California’s labor market remains fundamentally resilient, supporting steady housing demand.
Local Activity & Recent Transactions
Local Activity
The Los Angeles housing market is displaying a unique late‑summer dynamic:
• Median home list prices (August): Holding in the $920,000–$965,000 range, essentially flat versus July.
• Active listings: Continued to rise, now 50%–55% higher than a year ago in many neighborhoods, the highest supply levels since 2019.
• Buyer leverage: Increased inventory is creating more room for negotiation. Properties are averaging 40+ days on market, compared with 37 days earlier this year.
While buyers have more opportunities, persistent affordability constraints and still‑robust demand for well‑located homes have kept prices from declining in a meaningful way
With mortgage rates retreating and supply up, the fall market could see renewed buyer activity, especially if mortgage rates continue to drift downwards in September. This should help stabilize the market at current price levels, preventing significant declines.
Recent Closed Loans
Here are a few recent examples of how I get deals closed quickly and smoothly, often with rates and terms that are hard to beat.
New Home Purchase | West Los Angeles | $2.85M
Doctor’s Loan
90% LTV financing
5.74% interest rate | 5.84% APR
NO PMI
THIS IS THE ONLY DOCTOR PROGRAM THAT GOES TO 90% LTV IN CALIFORNIA!
CLOSED IN 21 DAYS
Home Equity Line of Credit (HELOC) | Brentwood
Home value – $12M | Line of Credit – $5M
70% line of credit
full income documentation
6.85% interest rate | 6.95% APR
5YR interest-only loan | highly leveraged borrower
LOWEST LINE OF CREDIT RATE IN THE COUNTRY
CLOSED IN 21 DAYS
New Home Purchase | Hancock Park | $6.75M
75% LTV financing
5.60% interest rate | 5.70% APR
10YR ARM
CLOSED IN 21 DAYS
National Housing & Economic Reports to Monitor in September:
September 17: Building Permits and Housing Starts
September 17: Fed Interest Rate Decision
September 23: Existing Home Sales Data
September 24: New Home Sales Data
With mortgage rates easing, the Fed likely cutting rates soon, and rising home inventory in Los Angeles, now’s a great time to explore your options or make a move. If you want to discuss how these trends affect your goals or get personalized guidance, don’t hesitate to reach out.
Mark Cohen