Welcome to my March newsletter, featuring personal insights, mortgage rate updates, and key economic trends affecting the Los Angeles housing market.
Interest Rates
Last week, fears around the economic impact of recent tariffs ended nine straight days of a stabilizing bond market and mortgage rate drops. We are still below some of the interest rate highs of 2024 and I expect rates to continue to swing a few tenths plus or minus this month as investors weigh in on economic shifts.
The Federal Reserve will decide the week after next on an interest rate cut, but most experts believe we won’t see another decrease until June.
Here is where rates sit on some of our most sought after loan products:
• 5.550% on 7YR jumbo ARMs up to $10M with income documentation and banking relationship
• 5.750% on 10YR ARMs up to $10M with income documentation and banking relationship.
• Bank statement loan rates range from high 6s to low 7s, based on loan-to-value (LTV) and strong credit.
• Mid-5% rates available with strong private banking deposits.
• Call for aggressively priced private banking loans in the high 5s up to $20M.
Employment Reports
The U.S. employment summary dropped yesterday, creating some much needed enthusiasm in the financial markets. Notably, federal employment decreased by 10,000 positions, reflecting the impact of aggressive cuts to federal agencies under President Trump’s directive.
Here is a quick snapshot of the latest employment data:
• February Jobs Report: +151,000 jobs (slightly below expectations)
• Unemployment Rate: Increased to 4.1%
• Job Openings: Declined (JOLTS report continues downward trend)
• Layoffs: Remain low
• Hiring: Still outpacing job departures
Local Activity & Recent Transactions
The recent Los Angeles County wildfires have impacted property values, creating a complex and challenging situation for our local real estate market.
With an estimated 40,000 people now considering their next steps, those with the means to do so are dominating the higher end of the market. Competition for homes in the $1M to $2M range remains fierce in most parts of the county due to limited inventory. This dynamic is further intensified as recent fire victims and first-time buyers take advantage of lower interest rates, leading to a highly competitive environment for available properties.
As you navigate a tough buyer’s market, remember that the highest offer doesn’t always win. A loan approval from a trusted mortgage broker like myself can be the key to securing your purchase by providing sellers with the assurance that you can close.
Recent Closed Loans
New Home Purchase | Encino | $3.2M
75% LTV financing
Interest rate in mid 7’s
Foreign national borrower
No credit history or social security number
New Home Purchase | Santa Monica | $6.25M
80% LTV Financing
7YR ARM
5.850% interest rate | 5.920% APR
Full income documentation
New Home Purchase | Playa Vista | $2.17M
Doctor’s Loan
90% LTV Financing
7YR ARM
6.125% interest rate | 6.220% APR
Full income documentation
No PMI
21-day close
New Home Purchase | Palos Verdes Estates | $5.8M
80% LTV Financing
7YR ARM Interest-Only
5.790% interest rate | 5.840% APR
Full income documentation
New Home Purchase | Laguna Beach | $2.3M
85% LTV Financing
7/1 ARM
5.875% interest rate | 5.990% APR
No PMI
21-day close
Investment Property Loan | Sherman Oaks | $4.75M
10/1YR ARM to pay off existing construction loan
7.500% interest rate | 7.625% APR
No tax returns
DSCR qualified on rents
National Housing & Economic Reports to Watch for This Month:
March 18 – Building Permits, Housing Starts
March 19 – Fed Interest Rate Decision
March 20 – Existing Home Sales
March 25 – New Home Sales
March 27 – Pending Home Sales
If you’re considering a home purchase, refinance, or investment property, now is the time to explore your options. Interest rates are stabilizing and in a competitive market, having the right mortgage broker and loan structure can give you an edge.
Let’s talk about how I can position you for success.
Sincerely,
Mark Cohen