LOS ANGELES REAL ESTATE REPORT

Last Update: March 13, 2026

Rising Oil Prices Push Mortgage Rates Higher Despite Stable Inflation

A quick note from us

This week, mortgage rates edged higher primarily due to climbing oil prices, which continue to influence market sentiment. Inflation reports, including the Consumer Price Index and Core PCE, matched expectations and showed steady trends, with core CPI at its lowest level since 2021. Shelter costs remain a key factor in inflation, rising 3.0% annually, though rent increases have slowed to their smallest monthly gain since early 2021. Existing home sales rose 2% from January, surpassing expectations, yet inventories remain tight at a 3.8-month supply, well below balanced market levels. As we look ahead, geopolitical tensions and upcoming Fed meetings will be critical to watch for their impact on rates and housing demand.

What this means for buyers: Buyers face higher mortgage rates driven by external factors like oil prices, making affordability a key consideration. Limited inventory means competition remains strong, so having a clear strategy and readiness to act is essential.

What this means for sellers: Sellers benefit from continued low inventory and steady demand, supporting pricing power. However, rising rates may temper buyer enthusiasm, so pricing homes competitively and highlighting value is important.

Inflation Remains Steady with Core CPI at Lowest Since 2021

Core CPI, which excludes volatile food and energy prices, held steady at 2.5% annual growth in February, meeting expectations and marking the lowest level since 2021. Shelter costs, a major inflation driver, increased 3.0% year-over-year, though rent growth slowed to just 0.1% from January, the smallest monthly rise in over five years.

What this means for buyers: Stable inflation helps maintain purchasing power, but persistent shelter cost increases mean housing affordability challenges remain.

What this means for sellers: Continued shelter inflation supports home price resilience, reinforcing the value of well-priced properties in a tight market.

Fed’s Preferred Inflation Gauge Shows Slight Uptick

The Core Personal Consumption Expenditures (PCE) price index, favored by the Fed, rose 3.1% annually in January, up slightly from December and the highest reading since March 2024. This indicates ongoing challenges in reaching the Fed’s 2.0% inflation target, with healthcare costs weighted more heavily than shelter in this measure.

What this means for buyers: The Fed’s focus on inflation may keep monetary policy cautious, potentially limiting rate cuts and affecting borrowing costs.

What this means for sellers: A steady inflation environment supports market stability, but sellers should be mindful of potential rate impacts on buyer demand.

Existing Home Sales Rise Amid Tight Inventory

Existing home sales increased 2% from January, beating expectations, though still slightly below last year’s levels. The median home price rose marginally by 0.3% year-over-year to $398,000. Inventory remains constrained at a 3.8-month supply nationally, though this is a 5% increase from last year, still well below the balanced market benchmark of six months.

What this means for buyers: Limited inventory means buyers must be prepared for competition and act decisively when opportunities arise.

What this means for sellers: Low supply continues to favor sellers, enabling strong pricing and quicker sales, especially for well-maintained homes.

Market Outlook: Geopolitical Risks and Fed Meeting in Focus

Looking forward, investors and market participants will closely watch developments in the Iran conflict and potential tariff announcements. The upcoming Federal Reserve meeting is expected to hold rates steady, but guidance on the impact of rising oil prices will be critical. Economic data releases, including the Producer Price Index and new home sales, will also provide insight into inflation and housing trends.

What this means for buyers: Uncertainty around geopolitical and policy factors calls for careful timing and flexibility in purchasing decisions.

What this means for sellers: Sellers should monitor market signals closely and be ready to adjust pricing or marketing strategies in response to evolving economic conditions.

Closing Remarks

Every buyer and seller enters the market with different priorities. For some, it is achieving the strongest possible price. For others, it is timing, certainty, or aligning the sale of one property with the purchase of another. In a market where mortgage rates are adjusting, inflation remains elevated, and policy headlines are influencing markets, strategy matters more than ever. The way a property is priced, negotiated, and managed from contract to closing can directly influence both your financial outcome and your timeline. The difference between a disciplined plan and a reactive one can equate to tens, and in some cases hundreds, of thousands of dollars. If you would like clarity on your home’s value in today’s rate environment, or a thoughtful plan for what you can confidently purchase as conditions evolve, we would welcome the conversation.

Jack Misraje

323-209-5225

Karen Misraje

310-488-1030