A quick note from us

This week, the mortgage market was primarily influenced by headlines about progress toward ending the conflict in the Middle East, which helped mortgage rates reverse course and end slightly lower after earlier increases. Economic data had a muted impact, with April's previously owned home sales rising slightly from March and remaining flat year-over-year. The median home price nationally edged up 1% to $417,700, while inventories stayed low at a 4.4-month supply, though slightly higher than last year. Housing starts showed mixed results, with multi-family units rising but single-family starts and permits declining. Builder sentiment improved unexpectedly but remains negative, with many builders offering incentives and price cuts. Demand for adjustable-rate mortgages increased, reflecting buyers' sensitivity to higher rates.

What this means for buyers: Buyers in Los Angeles should be aware that while mortgage rates have eased slightly, they remain elevated, encouraging interest in adjustable-rate loans. Limited inventory means competition remains strong, so having a clear strategy and readiness to act is crucial.

What this means for sellers: Sellers can expect steady demand supported by low inventory, but should consider that buyers are increasingly price-sensitive, with builders offering incentives and price reductions. Pricing properties competitively will be key to attracting qualified buyers.

Sales and Prices Show Modest Gains

Nationally, sales of previously owned homes in April rose slightly from March, aligning with expectations, and were unchanged compared to a year ago. The median price increased modestly by 1% year-over-year to $417,700. Inventory remains constrained at 4.4 months' supply, well below the balanced market norm of six months, though inventories have inched up compared to last year.

What this means for buyers: Limited inventory in Los Angeles means buyers may face fewer options and should be prepared for competitive bidding situations, especially for well-priced homes.

What this means for sellers: Sellers benefit from tight inventory, which supports pricing power, but should remain mindful of market sensitivities to pricing and condition.

Housing Starts and Builder Sentiment Mixed

April housing starts declined 3% from March, but multi-family units increased 10% to the highest level since May 2023. Single-family starts fell 9%, and single-family permits dropped 3% to the lowest level since August. Builder sentiment unexpectedly rose to 37, above forecasts but still negative for over two years. Many builders are using sales incentives and price cuts to attract buyers.

What this means for buyers: Increased multi-family construction may offer more options soon, but single-family supply remains constrained, impacting choices in Los Angeles.

What this means for sellers: Sellers should recognize that new construction competition is increasing, particularly in multi-family segments, which may influence buyer preferences.

Mortgage Applications Reflect Rate Sensitivity

Higher mortgage rates have dampened overall loan origination, but demand for adjustable-rate mortgages has grown, reaching nearly 10% of total applications - the highest since October 2025. Refinance applications dropped slightly but remain 35% higher than last year, while purchase applications fell 4% from the prior week but are 8% higher year-over-year.

What this means for buyers: Buyers in Los Angeles may find adjustable-rate loans a more attractive financing option given current rate levels, potentially improving affordability.

What this means for sellers: Sellers should be aware that financing dynamics are shifting, which could affect buyer qualification and purchasing power.

Market Outlook and Upcoming Data

Attention remains focused on the Middle East conflict and Fed officials' comments on monetary policy. Key upcoming economic releases include Consumer Confidence on Tuesday and Core PCE inflation data, New Home Sales, and Personal Income on Thursday. Mortgage markets will be closed Monday for Memorial Day.

What this means for buyers: Staying informed on economic indicators and geopolitical developments will help buyers anticipate market shifts and plan purchases accordingly.

What this means for sellers: Sellers should monitor market conditions closely as upcoming data releases may influence buyer sentiment and mortgage rates.

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 new construction is increasing competition, 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.