Los Angeles Real Estate Market Update - October 2024

C.A.R. released its forecast for 2025 last week and expects both home sales and home prices to continue their upward trend. Home sales are expected to rise by more than 10% next year as dwindling interest rates help to bolster demand and unlock critical housing supply to generate a second consecutive uptick in transactions. Home prices are expected to continue their upward trend as well since the increase in supply will still leave inventory very tight by historical standards. Even though inventory will be up from the past two years, it will only help to normalize price growth from the double-digit range, where it was earlier this year, into the mid-single-digits in 2025. Fortunately, the economy is currently forecast to narrowly avoid a recession, which should be a net positive for housing next year as well.

The fed funds rate was lowered on Sept.17th by half a percentage point for the first time since 2020. With the rate cut fully anticipated by the market before the announcement, mortgage rates did not show any immediate downward movement after the latest FOMC meeting. The central bank’s latest move and its plan on future rate reductions, however, will benefit homebuyers and home sellers in the coming months. With mortgage rates remaining near the lowest level in two years and home prices softening through the end of the year, housing activity could pick up in the Fall as consumers seize the opportunity of lower costs of borrowing and re-enter the market.

As more Buyers enter the market however we could see home prices move up even more than predicted this year. If you are a Buyer looking to purchase, now would be a good time to make the leap!

• California Association of Realtors - Market Minute

• Bron Realty Group