Norada Real Estate Investments

Archives for June 2025

Mortgage Rates Today June 27, 2025: 15-Year & 30-Year Fixed Rates Drop Significantly

by

As of today, June 27, 2025, mortgage rates are seeing a downward trend, making it a favorable time for both home buyers and those looking to refinance. The national average for the 30-year fixed mortgage rate has decreased to 6.72%, down from 6.73% last week and significantly lower than 6.91% a week ago. Similarly, the average 15-year fixed mortgage rate has dipped to 5.73% from 5.76%. These rates present an opportunity for homeowners and prospective buyers to capitalize on lower monthly payments.

Mortgage Rates Today June 27, 2025: 15-Year & 30-Year Fixed Rates Drop Significantly

Key Takeaways

  • Current Rates: National average mortgage rates for a 30-year fixed mortgage stand at 6.72%, reflecting a decrease of 19 basis points from last week.
  • Refinance Opportunity: Average refinance rates for a 30-year fixed loan have climbed slightly to 7.12%, but are lower compared to prior weeks.
  • Market Predictions: Predictions suggest that mortgage rates may decline further in the second half of 2025.
  • Impact on Home Affordability: Lower rates improve buyer affordability, potentially boosting home sales and stimulating the housing market.

With these promising numbers, let's delve deeper into the mortgage and refinance landscape, providing insights into how these rates can affect your financial decisions.

Current Mortgage Rates Overview

Here's a summary table illustrating the recent mortgage and refinance rates:

Loan Type Current Rate 1W Change APR 1W Change
30-Year Fixed Rate 6.72% -0.19% 7.19% -0.19%
20-Year Fixed Rate 6.03% -0.55% 6.51% -0.44%
15-Year Fixed Rate 5.73% -0.24% 6.03% -0.23%
10-Year Fixed Rate 5.59% -0.34% 5.96% -0.11%
7-Year ARM 6.78% -0.65% 7.65% -0.16%
5-Year ARM 7.56% +0.36% 7.99% +0.20%
30-Year Fixed Refinance 7.12% +0.09% 7.40% +0.08%
15-Year Fixed Refinance 5.94% +0.08% 6.88% +0.07%

Source: Zillow

Understanding Mortgage Payments Under Current Rates

Understanding how these rates impact your monthly mortgage payments is crucial for budgeting. Below are the estimated monthly payments for different loan amounts based on the current rates.

Monthly Payment on a $300,000 Mortgage

For a mortgage of $300,000 at a rate of 6.72% over 30 years, the approximate monthly payment would be $1,947. This calculation factors in the principal amount along with interest.

Monthly Payment on a $400,000 Mortgage

A mortgage of $400,000 at a rate of 6.72% would result in an estimated monthly payment of around $2,596. This reflects the increased financial commitment and how even minor differences in rate can result in substantial changes to monthly outlay.

Monthly Payment on a $500,000 Mortgage

Lastly, for a $500,000 mortgage at the same rate of 6.72%, the monthly payment would be approximately $3,246. Such estimates illustrate how larger loans significantly impact budget planning.

Having clear payment estimates can greatly help potential borrowers in deciding how much they can afford, providing a practical viewpoint on borrowing.

Analysis of Mortgage Trends in 2025

Are Mortgage Rates Decreasing in 2025 or Fluctuating?

Based on the recent figures, mortgage rates are indeed on a downward trend as of late June 2025. This is in stark contrast to the fluctuations seen in previous years. For instance, while the rates did experience minor increases earlier this year, their consistent decline in recent weeks indicates a shift towards increased buyer affordability. Economists believe that as supply in the market increases, some downward pressure on rates will persist.

Market Influence Factors
  1. Economic Indicators: Key economic indicators such as inflation rates, job growth, and consumer spending patterns are closely monitored. Any signals of strengthened economic activity often lead to increased interest rates. However, as inflation appears to stabilize, there is potential for further declines in mortgage rates.
  2. Housing Demand: The housing market's dynamics play a critical role, with buyer demand directly influencing mortgage rates. As housing demand rises, competition among the lenders can lead to lower rates to attract buyers.
  3. Government Policy Changes: Federal Reserve policies, particularly on interest rates and bond buying, will continue to exert influence on mortgage rates. A more accommodative monetary policy could lead to continued reductions.

How Low Will Mortgage Rates Go in 2025?

According to forecasts from the National Association of REALTORS® and Freddie Mac, it’s anticipated that mortgage rates could average around 6.4% in the latter half of 2025 and further drop to about 6.1% in 2026. These projections suggest that with improvements in the economy and housing supply, lower mortgage rates could become more prevalent.

Refinance Opportunities Amid Changing Rates

As mortgage rates fluctuate, refinancing presents a viable strategy for homeowners looking to optimize their loans. Many homeowners could benefit from refinancing at lower rates, improving cash flow, or accessing equity.

Current Refinance Rates Overview

Loan Type Current Rate 1W Change APR 1W Change
30-Year Fixed Rate 7.12% +0.09% 7.40% +0.08%
20-Year Fixed Rate 6.03% -0.55% 6.51% -0.44%
15-Year Fixed Rate 5.94% +0.08% 6.88% +0.07%

Among the refinancing options, 30-year fixed refinancing rates hover around 7.12%. However, potential borrowers should remain cautious, as current refinance rates have risen slightly compared to previous weeks.

Benefits of Refinancing
  1. Lower Monthly Payments: Homeowners may capitalize on lower interest rates to reduce their monthly mortgage payments, enabling more savings for other expenses or investments.
  2. Access to Home Equity: Refinance options can allow homeowners to take advantage of their home equity for renovations or significant expenditures.
  3. Debt Consolidation: Some homeowners opt to refinance to consolidate other debts, such as student loans or credit cards, into a single, often lower-interest payment.

Understanding the Shifting Real Estate Market

Understanding the mortgage market landscape is critical for those looking to buy or refinance. As these rates fluctuate, potential buyers need to stay informed about market trends, lending standards, and economic forecasts that could impact their decisions.

Consumer Confidence and Market Trends

According to housing enthusiasts and analysts, consumer confidence plays a pivotal role in the real estate market. Increased buyer confidence can lead to higher sales volumes, further driving prices in competitive markets. The potential rise in sales in 2025 and beyond may reinforce buyer confidence, even as rates fluctuate.

The Long-Term Outlook for Housing

Long-term forecasts suggest that while rates could dip further over the foreseeable future, they are unlikely to plummet significantly. Economic stabilization and a balanced housing supply are vital components of a healthy market. Therefore, prospective buyers should weigh the benefits of entering the market now against potential opportunities in the years ahead.

Housing Market Predictions

  1. Home Sales Growth: Data from various sources suggest significant increases in home and new construction sales in 2025. Existing home sales are expected to rise by 6%, while new home sales could see a 10% increase. This growth indicates a recovery in the housing market from previous slowdowns and challenges.
  2. Price Stabilization: Predicted modest increases in home prices signal a return to normalized pricing. With median home prices projected to rise by about 3% this year, buyers may have to act sooner rather than later to secure favorable terms before prices climb significantly.
  3. Impact on Buyer Behavior: If rates continue to trend downward or stabilize at lower levels, many potential home buyers currently on the fence may feel encouraged to proceed with their home purchasing plans. This potential influx of buyers may lead to a more competitive market.

Final Thoughts: Given the data at hand, it seems that lower mortgage rates could be an advantage for both buyers and refinancers at this stage in the market. The consistent decrease in rates signals favorable conditions for many looking to purchase a home or refinance an existing mortgage.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

HOT NEW LISTINGS JUST ADDED!

Connect with a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now 

Also Read:

Should I Refinance My Mortgage Now or Wait Until 2026?

by

Deciding whether to refinance your mortgage now or wait until 2026 is a big question many homeowners are grappling with. Right now, in mid-2025, the average 30-year fixed mortgage rate is sitting around 6.77%. Forecasts suggest we might see a slight dip by the end of 2026. So, what's the right move for you? The short answer is: it truly depends on your individual circumstances, but if your current rate is significantly higher than what's available today and you plan to stay in your home for the long haul, exploring refinancing now could be a smart move to potentially save you a good chunk of money.

Should I Refinance My Mortgage Now or Wait Until 2026?

So, when should you refinance your mortgage? It's a critical question, and timing is everything. Drawing from my own experience as a homeowner and years of following mortgage market trends, I'll break down the key factors that will help you decide if refinancing is the right move for your financial future, and when to make it.

Understanding Mortgage Refinancing

First things first, let's make sure we're all on the same page. Refinancing simply means replacing your existing mortgage with a brand new one. People typically do this for a few key reasons:

  • To snag a lower interest rate: This is often the primary motivation, as a lower rate can significantly reduce your monthly payments and the total amount of interest you pay over the life of the loan.
  • To shorten the loan term: If you're in a better financial position, you might refinance from a 30-year mortgage to a 15-year one. This means higher monthly payments, but you'll own your home outright much faster and save a ton on interest in the long run.
  • To adjust loan type: For example, switching from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage can provide more payment stability.
  • To tap into home equity: A cash-out refinance allows you to borrow against the equity you've built in your home, though this should be approached with caution.

However, it's crucial to remember that refinancing isn't free. You'll encounter closing costs, which can include appraisal fees, title insurance, and lender fees. These costs typically range from 2% to 6% of the new loan amount. This is why carefully weighing the potential savings against these upfront costs is so important.

A Look at Current Mortgage Rates (June 2025)

As we sit here in June 2025, the mortgage rate environment is interesting. Based on recent data:

  • Freddie Mac reported an average of 6.77% for the week ending June 26, 2025.
  • Bankrate noted an average of 6.75% on June 27, 2025.
  • Zillow indicated rates at 6.72% on June 27, 2025.

So, generally speaking, you're looking at around 6.75% for a 30-year fixed-rate mortgage. To put this into perspective, we saw rates peak at over 8% in late 2023, before dropping to below 6% last fall. The current rates are definitely better than the recent high, but still not near the lows we've experienced in the past. For those considering a shorter term, the average 15-year fixed mortgage rate is hovering around 5.89%.

From my perspective, these rates, while not jaw-droppingly low, still present an opportunity for some homeowners who locked in rates much higher a few years ago.

What the Future Holds: Mortgage Rate Forecasts for 2025 and 2026

Trying to predict the future of interest rates is a bit like trying to predict the weather – the experts can give you their best guess, but things can change quickly. However, several reputable financial institutions have put out their forecasts for the coming year and beyond:

Organization 2025 Forecast 2026 Forecast Source
Fannie Mae 6.5% 6.1% Fannie Mae Forecast
Mortgage Bankers Association (MBA) 6.7% 6.3% MBA Forecast
National Association of Home Builders 6.66% 6.16% NAHB Outlook
National Association of Realtors 6.4% 6.1% NAR Forecast
Wells Fargo 6.29% 6.19% Wells Fargo Report
Realtor.com 6.3% Not specified Realtor.com Forecast

These forecasts generally point towards a modest decline in mortgage rates by the end of 2026, potentially landing somewhere in the range of 6.1% to 6.7% for a 30-year fixed mortgage.

The reasoning behind this expected dip often revolves around predictions of slower economic growth and potential interest rate cuts by the Federal Reserve. However, it's crucial to understand that these are just predictions. Factors like inflation, changes in government policy (like tariffs, as mentioned by Reuters), and overall economic stability can all throw a wrench in these forecasts.

In my opinion, while a slight decrease seems plausible, I wouldn't bank on a significant drop back to the ultra-low rates we saw a few years ago. The economic environment is just too different now.

The Federal Reserve's Role and Economic Influences

Speaking of the Federal Reserve, their actions (or inactions) have a significant impact on mortgage rates. Mortgage rates tend to closely follow the yields on U.S. Treasury bonds, and the Fed's monetary policy plays a big role in influencing those yields.

Currently, the Federal Reserve has held its federal funds rate in the 4.25%-4.5% range since December 2024. Experts have suggested that the Fed might start considering rate cuts around mid-2025, with investors anticipating a few quarter-point cuts throughout the rest of the year. If these cuts materialize, we could indeed see some downward pressure on Treasury yields and, consequently, mortgage rates.

However, as Reuters points out, things like new trade policies and tariffs could lead to higher inflation, which might make the Fed hesitant to cut rates too quickly. On the flip side, a weaker-than-expected economy could push the Fed to cut rates sooner and more aggressively.

This uncertainty is a key reason why trying to time the market perfectly is so difficult. There are so many moving parts!

Key Questions to Ask Yourself: Refinance Now or Wait?

Now, let's get down to the brass tacks. To help you decide whether to refinance your mortgage now or wait until 2026, here are some critical questions to consider:

What is your current mortgage interest rate? If your current rate is significantly higher than the 6.7% we're seeing now (say, 7.3% or higher), refinancing now could offer substantial savings. Even a seemingly small difference can add up to a lot of money over the life of a 30-year loan.

Example: On a $300,000 loan, dropping your rate from 7.3% to 6.7% could save you around $115 per month, or $1,380 per year. Over 30 years, that's over $41,400 in interest saved!

My Take: If you're in this boat, I'd seriously consider looking into refinancing now. Don't wait and potentially miss out on these savings.

How much will the refinancing closing costs be? As mentioned earlier, these costs can range from 2% to 6% of your loan amount. You need to figure out your break-even point – how long will it take for your monthly savings to cover these upfront costs?

Example: If your refinancing costs are $9,000 and you save $115 per month, your break-even point is approximately 78 months (or 6.5 years).

Consideration: If the potential rate drop in 2026 is only going to save you a small amount each month, it might take a very long time to recoup the closing costs if you refinance now. In that case, waiting might be more sensible.

How long do you plan to stay in your home? This is a crucial factor. If you only plan to live in your home for another year or two, the savings from refinancing might not outweigh the closing costs.

My Experience: I've seen people refinance only to move shortly after, essentially throwing away the money they spent on closing costs. Be realistic about your future plans.

What are your other financial goals? Could the extra cash flow from lower monthly mortgage payments help you achieve other financial goals, like paying off high-interest debt or saving for retirement?

Think About It: Sometimes, the benefits of refinancing go beyond just the interest rate. The flexibility it provides in your monthly budget can be significant.

How comfortable are you with the current economic uncertainty? As we've discussed, there's no guarantee that rates will drop in 2026. Unexpected economic events could even cause them to rise.

My Perspective: If you can secure a rate now that significantly improves your financial situation, it might be worth taking it rather than gambling on future rate movements.

Practical Scenarios to Help You Decide

Let's look at a few common situations:

  • Scenario 1: You have a high current rate (7.3% or higher) and plan to stay long-term. In this case, refinancing now to a rate around 6.7% likely makes good financial sense. The long-term savings will likely outweigh the closing costs, and you'll enjoy lower monthly payments sooner rather than later.
  • Scenario 2: Your current rate is already close to the current market (around 6.4%). Refinancing now might not provide significant savings, and you'd still incur closing costs. Waiting to see if rates drop further in 2026 (potentially to the 5.8%-6.2% range) could be a better strategy, but you need to weigh the potential savings against the risk that rates might not drop as much as predicted.
  • Scenario 3: You plan to sell your home within the next 2-3 years. Refinancing now is probably not a good idea. You're unlikely to stay in the home long enough to recoup the closing costs through lower monthly payments. Waiting or simply sticking with your current mortgage is likely the more cost-effective approach.

Beyond Interest Rates: Other Refinancing Considerations

While the interest rate is often the primary focus, there are other reasons why you might consider refinancing:

  • Switching from a 30-year to a 15-year mortgage: This can save you a substantial amount of interest over the life of the loan and help you build equity faster. However, be prepared for higher monthly payments.
  • Changing from an ARM to a fixed-rate mortgage: If you're currently in an adjustable-rate mortgage, refinancing to a fixed-rate loan can provide more predictability in your monthly payments, especially if interest rates are expected to rise.
  • Cash-out refinance: If you have significant equity in your home, you might consider a cash-out refinance to access funds for things like home renovations or other major expenses. However, be cautious about increasing your mortgage balance.

Also, keep in mind that the rate you're offered will depend on your individual financial situation, including your credit score and loan-to-value ratio (Forbes Advisor). Even if market rates drop, you'll still need to qualify for a good rate. It's always a good idea to shop around with multiple lenders to see what kind of offers you can get.

Final Verdict: Refinance Now or Wait? My Personal Take

Given the current mortgage rate landscape in 2025 and the forecasts for a gradual, rather than dramatic, rate decline, my advice leans towards considering refinancing now if it makes financial sense for you.

If you're a homeowner with a mortgage rate significantly above these current averages, refinancing now to a rate in the high 6% range could deliver substantial monthly savings. Even a rate reduction of 1% or more can make a real difference in your budget.

Waiting until 2026 might bring slightly lower rates, but there's no guarantee. And remember, every month you wait, you're potentially missing out on savings if rates are already at a level that benefits you.

Ultimately, the best decision is a personal one based on your individual financial situation, risk tolerance, and goals. Don't just rely on averages – get personalized quotes from multiple lenders and crunch the numbers. Talk to a mortgage professional to explore your options and see if refinancing now, or perhaps in the near future, is the right move for you.

Maximize Your Mortgage Decisions in 2025

Thinking about whether to refinance now or wait until 2026? Timing is critical, and having the right strategy can save you thousands over the life of your loan.

Norada's team can guide you through current market dynamics and help you position your investments wisely—whether you're looking to reduce rates, pull out equity, or expand your portfolio.

HOT NEW LISTINGS JUST ADDED!

Talk to a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

U.S. States With Lowest and Best Mortgage Rates Today – June 26, 2025

by

Looking for the best deal on a mortgage? Today, June 26, 2025, the states boasting the lowest average 30-year mortgage rates for new purchases are New York, Colorado, Connecticut, California, Massachusetts, New Jersey, Florida, Idaho, Utah, and Virginia, with rates hovering between 6.69% and 6.80%. On the other hand, Alaska, Rhode Island, West Virginia, Iowa, New Mexico, North Dakota, South Dakota, and Maine, have the highest, ranging between 6.90% and 7.05%. But bear in mind as with everything related to money, Your Mileage May Vary!

U.S. States With Lowest Mortgage Rates Today – June 26, 2025

Okay, now that we've got the headline figures out of the way, let’s dive deeper into why these differences exist, what it means for you, and how you can snag the best possible rate, no matter where you live.

Why Do Mortgage Rates Vary From State to State?

It’s tempting to think mortgage rates should be uniform across the U.S., like the price of a Big Mac (though, even that varies!). However, several factors can influence mortgage rates from one state to another. These include:

  • Lender Presence and Competition: Not all lenders operate in every state. A state with more competition between lenders might see slightly lower rates as they jostle for your business.
  • State-Specific Regulations: Each state has its own set of regulations governing the mortgage industry, which can impact lender costs and, ultimately, the rates they offer.
  • Credit Score Averages: States with higher average credit scores might see slightly lower rates overall since lenders perceive lower risk.
  • Average Loan Size: The average loan size within a state, coupled with loan limits, might influence rates. Larger loan amounts sometimes come with slightly different pricing structures.
  • Risk Management Variation: A lender's internal appetite for risk can result in rate differences. For example, some lenders are comfortable working with loans requiring private mortgage insurance (PMI), while others seek to avoid these.

Essentially, it's a mix of local economics and lender strategy that creates these state-by-state variations. However, it shouldn't affect the rate in any way.

States Showcasing the Lowest Mortgage Rates

Let's take a closer look at the states currently enjoying some of the most competitive mortgage rates, according to Investopedia's analysis and Zillow's data:

  • New York: New York is a financial hub along with having a diverse blend of urban areas and suburban communities.
  • Colorado: Known for its outdoor lifestyle and booming tech sector, Colorado's attractive real estate market has been balanced by a healthy mortgage rate.
  • Connecticut: The charm of Connecticut lies in its good schools and easy access to New York City, and these have drawn people to move and keep the local real estate market stable.
  • California: Despite its high cost of living, California's robust economy and strong demand for housing ensures a steady flow of mortgage activity.
  • Massachusetts: Top-notch universities and access to healthcare are a selling point of Massachusetts, which keeps its housing market active.
  • New Jersey: Located near NYC and with a lot of jobs, New Jersey has a high demand for real estate.
  • Florida: The attractive climate and low tax rates of Florida are a big draw, that help sustain the constant demand for housing.
  • Idaho: The appeal of smaller town of Idaho and outdoor recreation, the increase in population has led to competition for homes.
  • Utah: Utah's tech employment opportunities and a rapidly increasing population are drawing people into the mix.
  • Virginia: Virginia gives access to government jobs and military installations, and an overall good quality of life.

These states often have a combination of strong economies, competitive lending environments, and stable real estate markets, which contribute to their lower average mortgage rates.

States with the Highest Mortgage Rates

Now, let’s turn our attention to the states with the higher end of the spectrum:

  • Alaska: Remote and with a unique economy based on natural resources, Alaska has factors that lead to higher lending costs.
  • Rhode Island: Small geographic location, Rhode Island's economy could be limiting competition, which means that there are higher rates.
  • West Virginia: West Virginia faces some economic challenges, and a more sparse housing market could contribute to higher rates.
  • Iowa: Iowa's rural setting and agricultural background might lead to less competition among lenders.
  • New Mexico: Economic factors in New Mexico may be restricting lending competition and influencing higher rates.
  • North Dakota: Limited competition and a sparse real estate market in North Dakota could lead to higher mortgage rates.
  • South Dakota: The rural setting, very similar to North Dakota can increase the mortgage rate.
  • Maine: Maine's smaller population and a more exclusive real estate market can affect mortgage rates.

National Mortgage Rate Trends – A Broader Perspective

While state-by-state variations are interesting, it’s crucial to understand the broader national trends influencing mortgage rates. According to recent data, the average 30-year fixed mortgage rate for new purchases is around 6.83%. This marks a decrease of 8 basis points over the past three days, reaching the lowest level since April 4th.

However, it’s worth noting that rates have been higher this year. In mid-May, the average surged to a one-year high of 7.15%. Throughout 2025, we’ve seen fluctuations, with rates dipping to as low as 6.50% in March and even lower, reaching a two-year low of 5.89% in September of last year.

Here’s a snapshot of national averages for different loan types from Zillow:

Loan Type New Purchase Rate
30-Year Fixed 6.83%
FHA 30-Year Fixed 7.55%
15-Year Fixed 5.85%
Jumbo 30-Year Fixed 6.82%
5/6 ARM 7.27%

What's Driving These Fluctuations?

Mortgage rates don’t just magically appear; they’re influenced by a complex web of factors, including:

  • The Bond Market: Monitor trends in the bond market, especially 10-year Treasury yields.
  • The Federal Reserve (The Fed): The Fed's monetary policy decisions play a large role, especially anything related to bond purchasing.
  • Lender Competition: The level of competition between mortgage lenders and different loan types.
  • Inflation: Concerns around inflation drive rates up, while confidence in controlling inflation tends to bring them down.

The Fed's Role and What To Expect

The Federal Reserve's actions have a huge impact on mortgage rates. In 2022 and 2023, the Fed aggressively raised the federal funds rate to combat high inflation, causing a dramatic increase in mortgage rates.

The Fed has maintained the federal funds rate at its peak starting in July 2023. Then they announced a first rate cut of 0.50 percentage points in September, with smaller cuts in November and December. However, at their latest meeting, they opted to hold rates steady, suggesting we might not see further cuts for several months. With eight rate-setting meetings scheduled each year, there's a chance we could see several more rate-hold announcements throughout 2025.

How to Secure the Best Rate for You

Now, let’s get to the practical part: how can you get the best possible mortgage rate? Here's my top advice:

  1. Shop Around, Shop Around, Shop Around: I can't stress this enough! Get quotes from multiple lenders. Don’t just settle for the first rate you see. Compare rates from different banks, credit unions, and online lenders.
  2. Boost Your Credit Score: A higher credit score translates to lower risk in the eyes of lenders, and a lower risk translates to better rates. Check your credit report for errors and take steps to improve your score if needed.
  3. Save for a Larger Down Payment: A larger down payment means you'll borrow less money, which can lead to a lower interest rate. Plus, putting down at least 20% can help you avoid private mortgage insurance (PMI).
  4. Consider Different Loan Types: Explore different loan types like fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, and VA loans to see which one best suits your financial situation.
  5. Be Aware of “Teaser Rates”: Be cautious of advertised rates that seem too good to be true. These “teaser rates” often require paying points upfront or are based on unrealistic scenarios (like an ultra-high credit score or a smaller-than-typical loan).
  6. Negotiate: Don't be afraid to negotiate with lenders. If you get a lower offer from one lender, see if another lender is willing to match or beat it!
  7. Understand Your All-In Costs: Don't just focus on the interest rate. Consider all costs, including closing costs, lender fees, and any points you might pay.

Buying a home is a huge, life-changing decision, and something I've gone through myself. Make sure to be fully informed and to take your time.

The Bottom Line

Mortgage rates are dynamic and influenced by a variety of factors, from state-level economic conditions to national monetary policy. While New York, Colorado, Connecticut, California, Massachusetts, New Jersey, Florida, Idaho, Utah, and Virginia shows the lowest rates today, remember that your individual rate will depend on your specific financial situation and creditworthiness. Do your due diligence, shop around, and don't be afraid to negotiate to secure the best possible mortgage rate for your dream home.

Invest in Real Estate in the Top U.S. Markets

Investing in turnkey real estate can help you secure consistent returns with fluctuating mortgage rates.

Expand your portfolio confidently, even in a shifting interest rate environment.

Speak with our expert investment counselors (No Obligation):

(800) 611-3060

Get Started Now

Also Read:

Southern California Housing Market: Prices and Forecast 2025

by

If you're trying to figure out what's going on with the Southern California housing market, you're not alone. In May 2025, the Southern California housing market experienced a slight downturn, with home sales and prices showing a minor pullback, reflecting broader economic uncertainties and elevated mortgage rates. Understanding these housing market trends is key whether you're thinking of buying, selling, or just keeping an eye on your investment. Let's break down what's happening.

Southern California Housing Market Trends: What's Happening in 2025?

Home Sales in Southern California

Across the state, things have been a bit bumpy. In May 2025, existing, single-family home sales in California totaled 254,190 on a seasonally adjusted annualized rate. That means, if sales kept going at the same pace all year, that's how many homes would be sold. Now, here’s the kicker: that number is down 5.1 percent from April and down 4.0 percent from May 2024. Southern California specifically mirrored this trend.

  • Southern California: Home sales fell by 7.6% year-over-year.

When we look at specific counties within Southern California, we see a mixed bag. Some counties experienced declines, while others saw increases in home sales.

  • Imperial: -5.9%
  • Los Angeles: -7.9%
  • Orange: -16.0%
  • Riverside: -8.2%
  • San Bernardino: -3.3%
  • San Diego: -4.6%
  • Ventura: -1.2%

It is important to note that Orange County experienced the most significant sales decline in Southern California, with a decrease of 16%. Overall, the trend suggests a cooling of the market in Southern California.

Comparison with National Home Sales in the U.S. in May 2025

Nationally, home sales are also experiencing a slight decrease. According to the National Association of Realtors (NAR), home sales were down by 0.7% year-over-year in May 2025. This suggests that the dip in Southern California's home sales is part of a larger national trend. While national figures show a decrease, keep in mind that real estate is very local!

Home Prices in Southern California

Now, let's move on to the big question: what's happening with home prices in Southern California?

In May 2025, the statewide median home price was $900,170. That’s down 1.1 percent from April and down 0.9 percent from May 2024.

  • Southern California: The median home price was $888,000, which is a slight increase of 0.9% from May 2024.

Are Home Prices Dropping?

Well, it's complicated. While the statewide median price did see a slight dip, the Southern California region actually saw a minor increase. This suggests that prices are leveling off, but not necessarily crashing. As Heather Ozur, C.A.R. President, said, “With home prices leveling off and more homes coming onto the market, it’s a great time for well-qualified buyers to enter the market.”

Here's a more detailed look at median home prices in Southern California counties:

  • Imperial: $377,450 (-6.8%)
  • Los Angeles: $835,480 (2.9%)
  • Orange: $1,419,500 (-0.2%)
  • Riverside: $638,000 (-1.0%)
  • San Bernardino: $497,940 (5.6%)
  • San Diego: $1,050,000 (2.4%)
  • Ventura: $985,000 (6.5%)

From the data, Los Angeles, San Bernardino, San Diego, and Ventura counties saw an increase in prices. On the other hand, Imperial, Orange, and Riverside saw a decline.

Comparison with Current National Median Price in the U.S.

Nationally, the median home price in May 2025 was $422,800, with a year-over-year change of +1.3%. This is significantly lower than the median price in Southern California. The California market remains more expensive than the national average.

Housing Supply in Southern California

Okay, so what about the number of homes available? This is a big factor in whether it's a good time to buy or sell.

In May 2025, the unsold inventory index (UII) in California was 3.8 months, up from 3.5 months in April and 2.6 months in May 2024. This means it would take 3.8 months to sell all the homes currently on the market at the current sales rate. Total active listings in May rose nearly 50 percent year-over-year.

Is Southern California a Buyer's or Seller's Housing Market?

Generally, a UII of 6 months or higher is considered a buyer's market, meaning there are more homes available than buyers. A UII of less than 6 months is considered a seller's market, where there are more buyers than homes.

With a UII of 3.8 months, Southern California is still leaning towards a seller's market, but the rising inventory suggests it's becoming more balanced. This means buyers might have a bit more negotiating power than they did a year ago.

Market Trends in Southern California

So, what's driving these changes in the Southern California housing market? A few key factors:

  • Economic Uncertainty: Lingering economic uncertainties continue to affect buyer confidence.
  • Insurance Availability/Affordability: Rising insurance costs and availability are affecting some areas.
  • Elevated Mortgage Rates: Let's dive into this a bit more.

Impact of High Mortgage Rates on Southern California Housing Market

High mortgage rates are probably the biggest factor impacting the Southern California housing market right now. Higher rates mean higher monthly payments, which can put a serious damper on affordability.

  • Current Rates: As of June 26, 2025, the average 30-year fixed mortgage rate is around 6.77%, and the 15-year fixed rate is about 5.89%.
  • Future Forecasts: Most experts predict mortgage rates will stay around this level for the rest of the year, possibly dipping slightly to between 6.0% and 6.5% by the end of 2025.

Here's a table summarizing the key data points:

Metric Southern California (May 2025) National (May 2025)
Median Home Price $888,000 $422,800
Year-over-Year Price Change +0.9% +1.3%
Home Sales Change YOY -7.6% -0.7%
Unsold Inventory Index 3.9 months N/A
Days on Market 25 days N/A
30-Year Mortgage Rate (Current) 6.77% 6.77%
30-Year Mortgage Rate (Forecast End of Year) 6.0-6.5% 6.0-6.5%

The Bottom Line for Southern California

The Southern California housing market is in a state of flux. Home sales are down, prices are leveling off, and inventory is rising. High mortgage rates and economic uncertainty are playing a big role.

If you're a buyer, this might be a good time to start looking. You'll have more choices and potentially more negotiating power. But be prepared for those higher mortgage rates!

If you're a seller, it's important to be realistic about pricing. The days of easy profits might be over, but well-priced homes in desirable locations are still selling.

As C.A.R. Senior Vice President and Chief Economist Jordan Levine said, “Although the market has slowed in recent months, there’s potential for a rebound if economic concerns subside.” Keep an eye on the market and talk to a local real estate agent for the most up-to-date information.

Southern California Housing Market Forecast 2025

Looking ahead, I believe that the Southern California housing market will continue to be a competitive environment for buyers, but with some opportunities.

  • I expect home price appreciation to slow further in 2025, with growth rates potentially declining to the 2-4% range.
  • The housing supply is expected to increase gradually, offering more choices to buyers.
  • Interest rates will likely remain elevated, but their impact on the market is expected to lessen as people adjust to the new norm.
  • Demand for housing in Southern California will likely remain strong, driven by population growth and the desirability of the region.

My overall forecast is for a more balanced market in 2025. While it will still be a seller's market in many areas, buyers will have slightly more leverage.

In my experience, this market is more sensitive to changes in interest rates than some others. As interest rates stabilize or potentially decline, we could see renewed buyer confidence and a pickup in activity. I also feel that areas with a higher concentration of jobs, including those around the tech and entertainment sectors, are likely to remain robust compared to some of the more rural parts of Southern California.

San Diego Housing Market: Trends and Forecast 2025-2026

by

If you're wondering about the San Diego housing market trends, here's the scoop: While California's housing market is showing signs of cooling off, San Diego remains a relatively strong market. In May 2025, the median sold price for a single-family home in San Diego County was $1,050,000, which is up from $1,025,000 in May 2024. However, home sales have decreased slightly year-over-year. Let's dive into the details and see what's really going on.

San Diego Housing Market Trends: What's Happening in May 2025?

Home Sales in San Diego

The number of homes being sold is a key indicator of the housing market's health. Fewer sales can point to hesitation from buyers, while a surge in sales suggests high demand. So, how did San Diego do in May 2025?

While the median home price in San Diego went up, the number of homes sold actually decreased. This tells us that fewer people bought homes compared to last year, but those who did paid more on average.

  • May 2025 Sales: Down 7.3% month-over-month (from April 2025)
  • May 2025 Sales: Down 4.6% year-over-year (from May 2024)

Comparison with National Home Sales in the U.S. in May 2025

Nationally, home sales are also down. According to the National Association of Realtors (NAR), there was a 0.7% decrease year-over-year in May 2025. This indicates a general cooling trend in the U.S. housing market, but the drop is significantly less severe than the drop in CA.

Here's a quick look at how San Diego's home sales compare to national trends:

Area Sales Trend (Year-over-Year)
San Diego -4.6%
United States -0.7%

This table makes it clear that San Diego's housing market is experiencing a more significant slowdown in sales compared to the national average.

Home Prices in San Diego

Okay, so sales are down a bit, but what about prices? This is where things get interesting.

  • May 2025 Median Price: $1,050,000
  • April 2025 Median Price: $1,015,000
  • May 2024 Median Price: $1,025,000

These numbers show a few things. First, the median price increased from April to May 2025, indicating a month-over-month rise. Second, the median price in San Diego also increased compared to May 2024, meaning homes are generally more expensive than they were a year ago.

Are Home Prices Dropping?

The short answer is no, not really. While the overall California median home price dipped slightly (-0.9% year-over-year), San Diego's home prices are still on the rise. The California Association of Realtors (C.A.R.) reports that the statewide median home price in May 2025 was $900,170, down from $908,000 in May 2024. This statewide dip is influenced by various factors like higher interest rates and economic uncertainty, but San Diego's housing market seems to be holding its own.

Comparison with Current National Median Price in the U.S.

The national median home price in May 2025 was $422,800, a 1.3% increase year-over-year. San Diego's median home price is significantly higher than the national average. This highlights just how competitive and expensive the San Diego real estate market is.

Here's a comparison table:

Area Median Home Price (May 2025) Year-over-Year Change
San Diego $1,050,000 +2.4%
United States $422,800 +1.3%

Housing Supply in San Diego

How many homes are actually available for sale? This is what we call “housing supply,” and it plays a big role in setting home prices.

  • Unsold Inventory Index (UII) May 2025: 3.4 months
  • Unsold Inventory Index (UII) April 2025: 2.9 months
  • Unsold Inventory Index (UII) May 2024: 2.4 months

The UII tells us how long it would take to sell all the homes currently on the market at the current sales rate. A higher number means there's more supply. The UII is up in San Diego, indicating that there are more homes available compared to both last month and last year. However, it's still relatively low compared to historical averages, meaning supply is still tight.

  • Median Days on Market (May 2025): 18 days
  • Median Days on Market (May 2024): 12 days

Homes are staying on the market longer than they did last year, but 18 days is still a very quick turnaround, especially in real estate.

Is San Diego a Buyer's or Seller's Housing Market?

Given these numbers, it's still leaning towards a seller's market in San Diego, though it's becoming more balanced. A seller's market means there are more buyers than homes available, giving sellers the upper hand. While inventory is increasing, it's not enough to dramatically shift the power to buyers just yet.

Market Trends Affecting San Diego Housing

Several factors are influencing the San Diego housing market, both locally and nationally.

Impact of High Mortgage Rates

Mortgage rates play a HUGE role in home affordability. When rates are high, it costs more to borrow money, which can discourage buyers.

  • Current 30-year Fixed Mortgage Rate (June 26, 2025): Around 6.77%
  • Current 15-year Fixed Mortgage Rate (June 26, 2025): About 5.89%

According to Freddie Mac, these rates have been relatively stable since mid-April 2025, fluctuating within a narrow range. Most experts predict that 30-year fixed mortgage rates will end 2025 between 6.0% and 6.5%.

The fact that mortgage rates are holding steady provides some comfort. Buyers can at least plan knowing that a drastic increase in rates isn't likely in the short term. While high mortgage rates can still affect sales, the stability gives buyers a sense of consistency.

Here's a table summarizing the mortgage rate forecast:

Mortgage Type Current Rate (June 2025) Expected Rate (End of 2025)
30-Year Fixed ~6.77% 6.0% – 6.5%
15-Year Fixed ~5.89% (Rate not projected)

Other Market Trends

  • Consumer Sentiment: According to C.A.R., consumer sentiment about buying a home is improving. More people (26% in May 2025) believe it's a good time to buy, which is the highest level since February 2022.
  • Listing Activity: New active listings are up year-over-year, giving buyers more choices. However, the growth rate of new listings is slowing down, which could mean that housing supply will plateau in the coming months.
  • Sales-Price-to-List-Price Ratio: This ratio was 100% in May 2025, meaning that homes are selling for their asking price on average. This further supports the idea that is still more beneficial for Sellers.

My Thoughts on the San Diego Housing Market

From my perspective, the San Diego housing market is going through a period of adjustment. The red-hot market we saw a few years ago has cooled down, but it's far from a cold market. Prices are still relatively high compared to sales figures. The San Diego market is facing a unique challenge, as inventory constraints in the area, coupled with high interest rates, are making things tougher for potential buyers.

If you're looking to buy in San Diego, be prepared for competition, but also take advantage of the increased inventory. Don't be afraid to negotiate, and work with a real estate agent who knows the local market well.

For sellers, it's still a good time to sell, but it's crucial to price your home competitively and make it appealing to buyers.

Ultimately, I believe the San Diego housing market will remain relatively stable in the coming months, with modest price increases and a gradual increase in inventory. However, keep an eye on those mortgage rates, as they will continue to be a key driver of market activity.

San Diego Housing Market Forecast 2025: What's Next for Home Prices?

Now, let's dive right in: what's the San Diego housing market forecast looking like? Based on the latest data, it seems we might see a slight dip in home values in the coming months.

Right now, the average San Diego-Carlsbad home value sits around $961,467. What's interesting is that homes are still moving relatively quickly, going pending in about 16 days. But what does the future hold? Let's break it down based on some credible forecasts.

A Look at the Short-Term: Mid-2025

According to Zillow's latest forecast, things might cool down a bit in the near future. Here's what they're predicting:

  • By the End of May 2025: We could see a decrease of about 0.5% in home values.
  • By the End of July 2025: The forecast suggests a further slight decrease, potentially reaching 1.2% lower than current values.

Now, these aren't massive drops, but they do indicate a potential shift in the market. Several factors could be at play here, including interest rates and overall economic conditions.

The Year Ahead: April 2025 to April 2026

Looking at a slightly longer timeframe, from April 2025 to April 2026, the forecast indicates a continued, though moderate, downward trend. Zillow predicts a decrease of around 0.7% in San Diego home values during this period.

How Does San Diego Compare to the Rest of California?

It's always helpful to see how our local market stacks up against other areas in California. Here's a quick comparison of the forecasted changes from April 2025 to April 2026:

California Region Forecasted Change (Apr '25 – Apr '26)
Los Angeles, CA -1.2%
San Francisco, CA -5.2%
Riverside, CA -0.1%
San Diego, CA -0.7%
Sacramento, CA -3.0%
San Jose, CA -3.8%
Fresno, CA -0.6%

As you can see, while most major California markets are also anticipating some level of price decrease, San Diego's projected dip seems relatively moderate compared to places like San Francisco.

Will Home Prices Crash in San Diego? My Opinion.

Based on the data and my understanding of the market, I don't foresee a housing crash in San Diego. A crash typically involves a rapid and significant decline in prices, often fueled by unsustainable lending practices or major economic shocks. While we might see some price softening, the current forecast suggests a more gradual adjustment.

What About Beyond 2026?

It's always tricky to predict too far into the future, but several factors suggest that the long-term outlook for the San Diego housing market remains relatively stable. Our desirable location, strong job market (especially in tech and biotech), and limited housing supply are all factors that tend to support property values over the long run. However, interest rates and broader economic trends will undoubtedly play a significant role. My hunch is that after this period of slight correction, we'll likely see a more stable market, possibly with modest appreciation in the years following 2026.

 

San Diego-Carlsbad Housing Forecast

April 2025
🏠
Median List Price
$937,750

Reflects current market demand as of April 2025.

⏱️
Median Days to Pending
16 Days

Homes are selling in around 16 days on average.

📊
For Sale Inventory
6,768

Active listings available as of April 2025.

📥
New Listings
2,671

New listings added in April 2025.

💰
Median Sale Price
$878,500

Sales price data as of March 2025.

📈
1-Year Market Forecast
-0.7%

Expected growth from April 2025 to April 2026.

“The San Diego-Carlsbad housing market remains strong, with increasing home values and steady demand as we look ahead.”

Why is Housing So Expensive in San Diego?

San Diego's allure is undeniable. Pristine beaches, perfect weather, and a vibrant city life make it a dream destination for many. But this paradise comes at a price, particularly when it comes to real estate. Let's delve into the factors driving San Diego's expensive housing market:

Limited Supply, High Demand

  • Geography: Nestled between the Pacific Ocean and mountains, San Diego has limited developable land. This scarcity creates a competitive seller's market, pushing prices upwards.
  • Desirable Location: San Diego's climate, job opportunities, and outdoor activities attract residents and retirees alike, placing constant pressure on a finite housing stock.

Economic Factors

  • Strong Local Economy: San Diego boasts a diverse and thriving economy, fueled by a strong tourism industry, a growing tech sector, and a robust military presence. The economy grew in 2021, adding over $11 billion to its gross regional product (GRP) compared to pre-pandemic levels. In 2022, the San Diego metro area's real gross domestic product (GDP) was $257.34 billion, a significant increase from the previous year's $250.06 billion. According to the UCLA Anderson March Economic Outlook, San Diego County is expected to grow 2.7% in 2023. This economic strength translates to job growth and attracts professionals with higher salaries who can afford premium housing.
  • Low Interest Rates (Historically): Over the past decade, interest rates have hovered near historic lows. This has significantly reduced the monthly mortgage payment for a fixed-rate loan, making homeownership more affordable for many buyers. For example, in 2016, the average 30-year fixed mortgage rate was around 3.5%. By 2 2021, that number had dipped below 3%, making it significantly cheaper to finance a home purchase. This easy access to cheap credit fueled a surge in buyer demand, which in turn drove up housing prices. While interest rates have risen in 2024, they remain historically affordable compared to long-term averages. However, even with slightly higher rates, the overall impact on affordability is mitigated by wage growth and a strong local economy.

Regulations and Taxes

  • Development Restrictions: San Diego, like many coastal cities in California, faces challenges in balancing growth with environmental protection. Strict zoning regulations, lengthy permitting processes, and environmental impact reviews can significantly slow down or even halt new housing developments. This can stifle the ability to increase housing supply to meet the growing demand, putting upward pressure on prices. Additionally, citizen groups and environmental concerns can further complicate the development process. While these regulations are important for safeguarding the natural beauty and character of San Diego, they can also contribute to the limited housing inventory and high costs.
  • Property Taxes: California has relatively high property taxes, with an average effective rate of 0.73% in 2023 according to the California Tax Foundation. This means that for a home valued at $1 million, the annual property tax bill would be around $7,300. High property taxes can impact affordability, particularly for first-time homebuyers or those on fixed incomes. However, these taxes also contribute to the overall perceived value of San Diego real estate. Property taxes are a major source of revenue for local governments, which use these funds to finance essential services like schools, roads, and public safety. Additionally, high property taxes can discourage speculation and absentee ownership, potentially leading to a more stable housing market.

National Trends

Nationwide Housing Market: While San Diego stands out, it's part of a larger national trend of rising housing costs. Investor activity and a national shortage of affordable housing contribute to the overall market dynamic.

The “Sunshine Tax”

San Diegans often jokingly refer to the high cost of living as the “sunshine tax.” While it might be a sardonic term, it reflects the reality that many people are willing to pay a premium to live in such a desirable location with a high quality of life.

How is the Rental Housing Market Doing in San Diego?

The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes.

The rental market will continue to grow as the city grows an estimated 500,000 population by 2050, adding tens of thousands each year. The median rent in San Diego is $2700. The rent you’d receive on single-family San Diego rental properties would, of course, be much higher.

Renters vs. Owners in San Diego

San Diego's property rental market is influenced by several factors, including the local economy, job opportunities, and the overall demand for housing. It's a city known for its mix of urban and suburban neighborhoods, each with its own rental and ownership dynamics.

San Diego had a diverse housing landscape with a mix of renters and property owners.

  • Renters: San Diego has a significant population of renters, comprising individuals and families who lease residential properties. This includes apartments, condominiums, townhouses, and single-family homes. The exact percentage of renters relative to property owners can vary by neighborhood and demographic factors.
  • Owners: San Diego also has a substantial number of property owners. These are individuals or entities who own residential properties and may either live in their properties or lease them out to renters. Property owners contribute to the diversity of the city's housing options.

Size of the Rental Market

The size of the San Diego property rental market is substantial, with a wide range of rental properties available to residents. This market includes apartments, houses, and various types of housing units. The exact size of the rental market can fluctuate based on factors like population growth, economic conditions, and housing development trends.

Real estate agencies, rental platforms, and government agencies often track and report on the status of the rental market, offering detailed insights into its size and dynamics.

For the most up-to-date and specific information regarding the current state of the San Diego property rental market, including the number of renters and property owners, it's recommended to refer to the latest reports and data from sources like local real estate associations, government housing agencies, and real estate websites.

San Diego's property rental market is an essential component of the city's real estate landscape, offering a wide range of housing options to its diverse population.

San Diego Apartment Rent Prices

As of December 2024, the median rent for all bedroom counts and property types in San Diego, CA is $2,900. This is +53% higher than the national average.

The monthly rent for an apartment in San Diego, CA is $2,695. A 1-bedroom apartment in San Diego, CA costs about $2,460 on average, while a 2-bedroom apartment is $3,321. Houses for rent in San Diego, CA are more expensive, with an average monthly cost of $4,000.

Rent prices for all bedroom counts and property types in San Diego, CA have decreased by 3% in the last month and have increased by 2% in the last year.

Housing Units and Occupancy

In terms of occupied housing units, San Diego has the following distribution:

  • Renter-occupied Households: Renter-occupied households make up 53% of the housing units in San Diego, indicating a significant presence of renters in the city.
  • Owner-occupied Households: Owner-occupied households account for 48% of the housing units, highlighting a balanced mix of homeowners in the area.

Affordable and Expensive Neighborhoods

San Diego's neighborhoods offer a range of rental prices, making it accessible for various budgets:

The Most Affordable Neighborhoods:

  • Bay Park: The average rent in Bay Park is $2,135 per month.
  • University Heights: In University Heights, the average rent is around $2,200 per month.
  • North Park: North Park offers an average rent of approximately $2,273 per month.

The Most Expensive Neighborhoods:

  • Carmel Valley: Carmel Valley is one of the more expensive neighborhoods, with an average rent of $2,942 per month.
  • Mission Valley East: In Mission Valley East, the average rent can go for $2,894 per month.
  • Mission Beach: Mission Beach has an average rent of $2,850 per month.

Popular Neighborhoods

Some neighborhoods in San Diego are particularly popular among renters:

  • Mission Beach: Mission Beach tops the list with 1,115 listings, making it a sought-after area for renters.
  • Pacific Beach: Pacific Beach is also a popular choice, offering 760 listings for prospective renters.
  • Ocean Beach: Ocean Beach features 295 places for rent, making it a vibrant neighborhood for renters.

These insights provide a snapshot of the current rental market in San Diego. Rental prices have seen some fluctuations in recent months, with variations in different apartment types. The city offers a range of neighborhoods to suit different budgets and preferences, with a balanced mix of renters and homeowners.

Bay Area Housing Market: Trends and Forecast 2025

by

Are you trying to figure out what's going on with the Bay Area housing market? You're not alone! It's a topic on everyone's mind, especially if you're thinking of buying or selling. In short, the Bay Area housing market is showing signs of cooling off in May 2025. While prices remain high, sales are down slightly compared to last year, and inventory is up, giving buyers more choices.

Bay Area Housing Market Trends: A Look at What's Happening Now

Home Sales

Let's dive into the numbers. According to the California Association of Realtors (C.A.R.), existing single-family home sales in California totaled 254,190 in May 2025 on a seasonally adjusted annualized rate. What does that mean? Basically, if sales continue at the same pace for the rest of the year, that's how many homes would be sold.

  • The Bay Area specifically saw a decline of 8.2% in home sales compared to May 2024.
  • Several counties experienced significant drops, indicating a slowdown in buyer activity.
  • Marin County was the only county that saw an increase in home sales with an 8.7% increase

Comparison with National Home Sales in the U.S. in May 2025

Nationally, home sales are also down slightly.

  • The National Association of Realtors (NAR) reported a 0.7% decrease year-over-year in May 2025.
  • This is a drop from 4.06 million homes sold in May 2024.

So, both the Bay Area and the nation are seeing a bit of a slowdown. It's not a dramatic crash, but definitely something to keep an eye on.

Home Prices

Are Home Prices Dropping in the Bay Area?

This is the million-dollar question (or, in the Bay Area, the multi-million-dollar question!). In May 2025, the statewide median home price in California was $900,170.

  • That's down 1.1% from April and 0.9% from May 2024.
  • The San Francisco Bay Area saw a price decrease of 3.8% year-over-year.
  • However, some counties saw price increases, showing that the market is still complex and varies by location.

Here's a table summarizing the key data for the Bay Area counties:

County Median Sold Price (May 2025) Year-over-Year Change
Alameda $1,365,000 -0.7%
Contra Costa $924,950 -1.9%
Marin $1,885,000 +4.7%
Napa $920,000 -6.8%
San Francisco $1,801,000 +6.6%
San Mateo $2,200,000 -8.3%
Santa Clara $2,171,125 +3.4%
Solano $590,000 -2.5%
Sonoma $860,000 -2.3%

As you can see, it's a mixed bag. Some counties are holding steady, while others are seeing prices dip.

Comparison with Current National Median Price in the U.S.

How does the Bay Area compare to the rest of the country? Well, the national median price is significantly lower.

  • The national median price in May 2025 was $422,800.
  • This is a 1.3% increase year-over-year.

So, the Bay Area is still much more expensive than the national average. Even with recent price drops, it's a whole different ballgame here.

Housing Supply

Is It a Buyer's or Seller's Housing Market?

This is a crucial question. Are buyers in the driver's seat, or do sellers have the upper hand? The answer is leaning towards a more balanced market, or even slightly favoring buyers.

  • The Unsold Inventory Index (UII) in California climbed to 3.8 months in May 2025.
  • That's up from 3.5 months in April and 2.6 months in May 2024.
  • Total active listings in May rose by nearly 50% year-over-year.

What does this mean? Basically, there are more homes available for sale, and it's taking longer to sell them. This gives buyers more options and more time to make a decision, which is good news if you're looking to buy.

  • In the San Francisco Bay Area, the Unsold Inventory Index is 2.9
  • It is important to note that last year it was only 1.9
  • All the Bay Area counties except Napa (7.3) and Sonoma (4.7) counties, the unsold inventory is below 5

Here's a table summarizing the data of a median number of days it takes to sell a home in Bay Area counties:

County Median Days to Sell (May 2025) Median Days to Sell (May 2024)
Alameda 13 12
Contra Costa 14 10
Marin 39.5 47
Napa 52 59
San Francisco 29.5 30.5
San Mateo 11 8
Santa Clara 9 8
Solano 40 35
Sonoma 56 44

Market Trends

Impact of High Mortgage Rates

Mortgage rates play a huge role in the housing market. Higher rates mean higher monthly payments, which can make it harder for people to afford homes.

  • As of June 26, 2025, the average 30-year fixed mortgage rate is around 6.77%.
  • The 15-year fixed mortgage rate is about 5.89%.
  • Forecasts predict rates to remain around this level for the rest of 2025, potentially dipping slightly to between 6.0% and 6.5%.

While these rates aren't historically high, they're significantly higher than the rock-bottom rates we saw a few years ago. This definitely has an impact on buyer demand.

Here is the market rate from Freddie Mac:

Mortgage Type Rate as of 06/26/2025
30-Year Fixed 6.77%
15-Year Fixed 5.89%

My Take on the Bay Area Housing Market

From my perspective, the Bay Area housing market is in a period of adjustment. We're not seeing the crazy bidding wars and rapid price increases of the past few years. Instead, things are settling down a bit.

Here are a few key takeaways:

  • More inventory: Buyers have more choices, which is a welcome change.
  • Slightly lower prices: Prices are down slightly in some areas, but still very high overall.
  • Slower sales: Homes are taking longer to sell, giving buyers more time to consider their options.
  • Mortgage rate impact: Higher mortgage rates are definitely affecting affordability and demand.

What Does This Mean for You?

  • If you're a buyer: You have more negotiating power than you did a year or two ago. Take your time, shop around, and don't be afraid to make an offer below the asking price.
  • If you're a seller: You need to be realistic about pricing. The market has shifted, and you may not get the same price you would have gotten a year ago. Focus on making your home attractive to buyers and be prepared to negotiate.

Final Thoughts

The Bay Area housing market is always a complex and dynamic beast. While there are signs of a slowdown, it's important to remember that real estate is local. What's happening in San Francisco might be different from what's happening in San Jose.

Bay Area Housing Market Forecast: What's Next?

You're probably wondering what the future holds for our crazy real estate market. So, let's get right to it: experts are predicting a bit of a dip in Bay Area home prices in the coming year. The average home in the San Francisco-Oakland-Hayward area is currently valued at around $1,180,795, and while it's gone up slightly over the past year, things might be cooling off a bit. Homes are still selling relatively quickly, going under contract in about 14 days, but let's dive deeper into what the forecasts suggest.

Short-Term Outlook: Mid-2025

Looking at Zillow's latest forecast, it seems we might see some slight decreases in home values in the next few months. For the period ending in May 2025, the prediction for the San Francisco metro area is a decrease of about 0.5%. This suggests a small softening in the market as we head into the late spring. Moving a bit further, by the end of July 2025, the forecast anticipates a more noticeable drop of around 1.9% in home values. This indicates a potential continued cooling trend over the summer months.

The Year Ahead: Spring 2025 to Spring 2026

Now, let's consider the bigger picture. Over the one-year period from April 2025 to April 2026, the forecast for the San Francisco area points to a more significant decline of approximately 5.2% in home values. While this isn't a crash, it does suggest that those hoping for rapid price appreciation might need to adjust their expectations. Several factors could be contributing to this, including interest rates, overall economic conditions, and the balance of supply and demand in our region.

Here's a quick look at the forecasted changes according to Zillow:

Area Forecasted Change by May 2025 Forecasted Change by July 2025 Forecasted Change (Apr '25 – Apr '26)
San Francisco, CA -0.5% -1.9% -5.2%

How Does the Bay Area Compare?

It's always helpful to see how our market stacks up against other parts of California. Here's a comparison of the one-year forecast (April 2025 to April 2026) for various metro areas in the state:

Area Forecasted Change (Apr '25 – Apr '26)
Los Angeles, CA -1.2%
San Francisco, CA -5.2%
Riverside, CA -0.1%
San Diego, CA -0.7%
Sacramento, CA -3.0%
San Jose, CA -3.8%
Fresno, CA -0.6%

As you can see, the forecast for the Bay Area, particularly San Francisco, suggests a more pronounced decrease compared to many other major California markets. San Jose is also expected to see a significant drop. This could be due to the higher initial prices in the Bay Area and potentially a greater sensitivity to economic shifts.

Will Bay Area Home Prices Crash? What About 2026?

Based on the current data, a housing market crash in the Bay Area seems unlikely. A crash typically involves a much more rapid and drastic decline in prices. What we're seeing is more of a correction or a cooling period.

As for a forecast for 2026, it's a bit too early to say with certainty. However, if the current trends continue and the forecasted decreases materialize, we might see a more stable or even slightly appreciating market in late 2026, especially if interest rates stabilize or come down. However, this is just my educated guess, and many factors could influence the market in the long term.

My Two Cents

Having followed the Bay Area real estate scene for a while now, these forecasts align with what I'm seeing and hearing. The intense bidding wars we experienced in recent years have definitely calmed down. Buyers seem to have more negotiating power, and sellers might need to be more realistic with their pricing. If you're a buyer, this could present some opportunities down the line. If you're a seller, it's crucial to understand the current market dynamics and price your property strategically.

It's important to remember that these are just forecasts, and the actual market can be influenced by many unpredictable events. However, staying informed and understanding these trends can help you make more informed decisions about your real estate journey in the Bay Area.

Factors Influencing the Bay Area Housing Market

Several key factors contribute to the unique dynamics of the Bay Area housing market:

1. Strong Economic Fundamentals

The Bay Area is home to a thriving technology sector and a diverse economy, attracting a highly skilled workforce. This strong economic base creates consistent demand for housing.

  • Tech Industry Dominance: The presence of major tech companies like Google, Apple, and Facebook continues to draw talent and investment to the region, further fueling demand for housing.
  • High Salaries: The competitive job market in the Bay Area translates to higher-than-average salaries, enabling some buyers to afford the region's expensive homes.

2. Limited Housing Supply

The Bay Area faces a chronic shortage of housing inventory, a key driver of high prices. Several factors contribute to this scarcity:

  • Geographic Constraints: Surrounded by water and mountains, the Bay Area has limited land available for new development.
  • Stringent Regulations: Strict zoning laws, environmental regulations, and community opposition often hinder new construction projects.

3. Desirable Lifestyle and Amenities

Beyond its economic prowess, the Bay Area boasts a desirable lifestyle that attracts residents.

  • Natural Beauty: From stunning coastlines to rolling hills, the region offers breathtaking scenery and abundant outdoor recreational opportunities.
  • Cultural Hub: The Bay Area is renowned for its vibrant arts and culture scene, world-class dining, and diverse communities.

These factors contribute to the high demand for housing, further exacerbating the supply-demand imbalance.

4. Long-Term Outlook

Predicting the future of any real estate market is inherently uncertain. However, several factors suggest a potential cooling in the Bay Area housing market in the long term:

  • Rising Interest Rates: As interest rates continue to rise, affordability challenges may further dampen demand.
  • Remote Work Trends: The rise of remote work could lead some residents to seek more affordable housing options outside the Bay Area.
  • Economic Uncertainty: Global economic headwinds and potential recessionary pressures could impact the Bay Area's economic engine, potentially softening housing demand.

Why Are Bay Area House Prices So High?

The high cost of housing in San Francisco can be attributed to several factors:

  • Strong Economy: The Bay Area is a global tech hub, home to Silicon Valley, and numerous tech giants. The region's strong economy attracts high-income professionals, leading to increased demand for housing, and driving up prices.
  • Limited Supply: Geographical constraints and strict zoning regulations limit new construction in San Francisco. The supply of housing struggles to keep up with the growing demand, resulting in scarcity and rising costs.
  • High Land Costs: The cost of land in San Francisco is exceptionally high, which makes it expensive for developers to acquire land for new housing projects. This cost is often passed on to homebuyers and renters.
  • Foreign Investment: San Francisco's reputation as a global city attracts international investors, further driving up property values.
  • Desirability: The city's quality of life, cultural attractions, and natural beauty make it a highly desirable place to live, leading to a willingness to pay a premium for housing.
  • Limited Space for Growth: San Francisco is surrounded by water on three sides, leaving limited room for urban expansion. This geographical constraint intensifies competition for available properties.

Which is the Hottest Real Estate Market in the Bay Area?

The Bay Area's housing market has a long history of intense competition, but lately, things have reached a new level. While the entire region continues to see strong demand, some areas are experiencing a particularly scorching heatwave. So, for those looking to buy, where's the hottest spot to land?

The Rise of the Suburbs: The Woodlands Takes Center Stage

Traditionally, urban centers like San Francisco and Oakland have been the hottest properties. However, a recent trend sees the crown shifting towards suburban havens. The Woodlands neighborhood in Walnut Creek, Contra Costa County, has emerged as a frontrunner.

According to the San Francisco Chronicle, home values in Woodlands have skyrocketed by 40% since February 2020, reaching a median price of $1.46 million. This dramatic rise is attributed to an influx of buyers seeking spacious homes, good schools, and a suburban lifestyle close to amenities and job centers.

Why Woodlands? Decoding the Appeal

Several factors contribute to Woodlands' sizzling market. Firstly, the pandemic's work-from-home trend has loosened the tie between location and office commutes. This allows buyers to consider areas further out from the urban core, where they can find larger properties with a more relaxed atmosphere.

Woodlands perfectly fits this bill, offering ample space for families and a sense of community, while still boasting proximity to shopping centers and top-rated schools.

Secondly, Woodlands benefits from a spillover effect. With San Francisco experiencing ever-increasing housing costs, buyers priced out of the city are looking at neighboring areas. Woodlands offers a more attainable option while maintaining a desirable Bay Area address.

Beyond Woodlands: Other Hot Pockets to Consider

While Woodlands is currently experiencing a surge, the Bay Area offers a diverse range of hot markets. Here are a few other contenders:

  • East Bay: Oakland continues to be a popular choice, particularly for those seeking a vibrant, urban environment with a close proximity to San Francisco.
  • South Bay: While traditionally expensive, areas like Campbell and Fremont are attracting buyers due to their proximity to Silicon Valley tech giants and a growing job market.

Remember, “Hot” is Relative

It's important to remember that “hot” is a relative term. The Bay Area housing market, in general, is highly competitive. While Woodlands might be experiencing the fastest price growth, other locations might offer better affordability or a specific lifestyle that suits your needs.

Should You Invest in the Bay Area Real Estate Market?

The San Francisco Bay Area is a magnet for real estate investors, but understanding the market landscape is critical. Here's a breakdown of key factors for informed investment decisions.

  • Enduring Demand: The Bay Area's allure for homebuyers remains strong, fueled by tech industry jobs and stunning natural beauty. This steady demand is a key factor for investors to consider.
  • Location is King: From vibrant downtowns to charming suburbs, the Bay Area boasts diverse neighborhoods. Meticulous research is essential, as each micro-market offers varying growth potential and rental yields.
  • Rental Market Strength: Evaluate the rental market performance in your chosen area. Robust rental demand can be advantageous for investors seeking income properties.
  • Picking Your Property: Will you invest in single-family homes, multi-unit buildings, or something else? Each type presents unique advantages and risks. Align your investment goals and risk tolerance with your property selection.
  • Expert Insights: Consulting with real estate professionals and economists is vital. Their market forecasts and insights can equip you to make informed investment decisions.

Is Real Estate Investment a Good Option in this Region?

Investing in the Bay Area's real estate market can be both lucrative and challenging. Here are some considerations:

  • Lucrative Returns: Despite high prices, rental rates in San Francisco are also substantial, making it possible to generate good rental income.
  • Appreciation Potential: The Bay Area's strong economy suggests that property values are likely to appreciate over time.
  • Diversification: San Francisco is known for its tech industry, and investing in real estate diversifies your investment portfolio, which may be tech-heavy.
  • Challenges: High property prices mean a substantial initial investment. Additionally, property management and regulations can be complex.
  • Risk Mitigation: Careful property selection, understanding market dynamics, and working with local experts can help mitigate risks.

Investor Preferences in the Bay Area

Investors in the Bay Area have various options to consider:

  • Residential Properties: Single-family homes and condos are attractive for long-term rental income.
  • Multi-Family Units: Apartments or multi-unit buildings can offer multiple rental income streams.
  • Commercial Real Estate: Office and retail properties may provide stable rental income, particularly in business districts.
  • Short-Term Rentals: With tourism being a significant part of the Bay Area's economy, short-term rentals through platforms like Airbnb can be profitable.
  • Real Estate Investment Trusts (REITs): For those seeking to invest without direct property ownership, REITs focused on the Bay Area offer an alternative.

Economy and Growth

The San Francisco Bay Area boasts a robust and diverse economy, primarily driven by the technology sector, often referred to as Silicon Valley. This economic powerhouse has led to sustained growth, high incomes, and a robust job market, making it a hotspot for professionals and businesses.

It's economy has performed well in the 21st century, despite several recessions. In 2022, the Bay Area's GDP grew by 4.8%, which was the highest in the country. This growth was well-rounded and uninhibited, and the Bay Area's economy has continued to perform well even after the COVID-19 pandemic. As a result, the region consistently attracts individuals seeking employment opportunities, which, in turn, fuels the demand for housing.

Housing Supply Shortage vs. Demand

The Bay Area faces a persistent challenge with housing supply shortages. Geographical constraints, coupled with stringent zoning regulations, limit the construction of new housing units. This limitation in supply collides with the consistently high demand for housing, primarily from tech professionals and other high-income earners. The resultant scarcity drives up property prices, making homeownership and rentals expensive propositions in the region.

Geography & Zoning Restrictions

Geography plays a significant role in the Bay Area's real estate market dynamics. Surrounded by water on three sides, the region has limited space for urban expansion. As a result, land is at a premium, and developers often face challenges in acquiring suitable land for housing projects. Zoning regulations, aimed at preserving the unique character of different neighborhoods, can further limit the potential for new construction. These factors collectively contribute to the scarcity of housing and rising property values.

It's Luxury Real Estate Market

The Bay Area hosts a thriving luxury real estate market, catering to high-net-worth individuals and investors. Luxury properties in prestigious neighborhoods like Atherton, Hillsborough, and Bel Air offer premium amenities and stunning views. The region's desirability, coupled with a strong economy, has sustained the luxury real estate segment, making it an attractive option for those seeking upscale investments.

High Real Estate Appreciation Rate

Despite the high cost of entry, real estate in the San Francisco Bay Area is known for its impressive appreciation rates. The region's strong economic fundamentals and limited supply have historically driven property values upward. This means that real estate investments often offer the potential for substantial capital gains over time.

While San Francisco's high housing costs can be a barrier, the region's strong economy and desirability continue to attract investors. Careful consideration of factors such as property type, location, and market dynamics is crucial for making informed investment decisions in the San Francisco Bay Area. Investors should assess their goals, risk tolerance, and long-term strategies to determine whether this market aligns with their investment objectives.

Los Angeles Housing Market: Forecast and Trends 2025-2026

by

If you're wondering what's happening with the Los Angeles Housing Market Trends in 2025, here's the scoop: things have cooled off a bit. While we saw some gains earlier in the year, recent data suggests a slight pullback in both sales and prices. Let's dive into the details and see what it all means for you, whether you're looking to buy, sell, or just stay informed.

Current Los Angeles Housing Market Trends in 2025:

Home Sales in Los Angeles

The latest numbers from the California Association of Realtors (C.A.R.) show that things have slowed down a bit in the Golden State, and Los Angeles is feeling the effects. Sales of existing single-family homes in California totaled 254,190 in May 2025, on a seasonally adjusted annualized rate.

While I don't have the exact sales figures for just Los Angeles County or the Metro Area, we can infer some trends from the regional data. Southern California overall saw a sales decrease of 7.6% compared to last year. And specifically, for Los Angeles, sales declined by 7.9% year over year.

What does this mean? It means fewer homes are changing hands compared to this time last year. This could be due to a few things, which we'll get into later, like mortgage rates and economic uncertainty.

Comparison with National Home Sales in the U.S. in May 2025

Nationally, the trend is similar, but maybe not as pronounced. According to the National Association of Realtors (NAR), there was a 0.7% decrease in home sales year-over-year in May 2025 (down from 4.06 million in May 2024). This indicates that the Los Angeles market is experiencing a sharper slowdown compared to the rest of the country.

Home Prices in Los Angeles

Let's talk about the big question everyone's asking: Are home prices dropping in Los Angeles?

The data shows a mixed bag. Statewide, the median home price in California was $900,170 in May 2025, which is a 1.1% decrease from April and a 0.9% decrease from May 2024.

Now, specifically for the Los Angeles Metro Area, the median sold price of existing single-family homes was $855,000, which is a 0.6% increase over April and a 1.8% increase over May 2024. So, while the state saw a slight dip, Los Angeles managed a small gain. That's a relief!

Are Home Prices Dropping?

The overall trend suggests that home prices may be leveling off rather than drastically dropping. There's a very small increase year over year. Factors like increased inventory could put downward pressure on prices in the coming months, however.

Comparison with Current National Median Price in the U.S.

The national median home price in May 2025 was $422,800, with a year-over-year change of +1.3%. This highlights just how much more expensive the Los Angeles market is compared to the rest of the country. Even with a potential slowdown, Los Angeles real estate is still a premium investment.

Housing Supply in Los Angeles

One of the biggest factors influencing the market is the housing supply. The Unsold Inventory Index (UII) for California in May 2025 was 3.8 months, up from 3.5 months in April and 2.6 months in May 2024.

This means it would take 3.8 months to sell all the homes currently on the market at the current sales rate. In Los Angeles, the UII is slightly higher, at 3.9.

Is It a Buyer's or Seller's Housing Market?

Generally, a UII of 6 months or higher indicates a buyer's market, while a UII of less than 6 months suggests a seller's market. So, while the Los Angeles market is still leaning towards a seller's market, the increase in inventory is giving buyers more options and more bargaining power.

Market Trends Affecting Los Angeles Real Estate

Several key trends are shaping the Los Angeles housing market right now.

Impact of High Mortgage Rates

Mortgage rates play a huge role in housing affordability. As of late June 2025, the average 30-year fixed mortgage rate is around 6.77%, and the 15-year fixed rate is about 5.89%, according to Freddie Mac.

How does this affect you? Higher mortgage rates mean higher monthly payments, which can deter potential buyers and cool down demand.

According to forecasts, the 30-year FRM rate will likely end 2025 between 6.0 to 6.5 percent. This relative stability is good news for borrowers, as it provides some predictability.

Here's a quick table summarizing mortgage rate trends:

Mortgage Type Current Rate (June 2025) Forecasted Rate (End of 2025)
30-Year Fixed 6.77% 6.0 – 6.5%
15-Year Fixed 5.89% (Likely to follow a similar downward trend)

Other Factors at Play

  • Economic Uncertainty: Lingering economic concerns and any potential trade issues can impact buyer confidence and slow down the market.
  • Consumer Sentiment: How people feel about the economy and the housing market matters. If people are optimistic, they're more likely to buy. The good news is that consumer sentiment seems to be improving.
  • Insurance Availability and Affordability: In California, rising insurance costs and difficulty obtaining coverage in certain areas can impact home values and buyer decisions.

Regional Differences Within Los Angeles

It's important to remember that the Los Angeles housing market isn't a monolith. Different neighborhoods and cities within the county can experience different trends. For example:

  • Luxury Markets: High-end areas might be more resilient to market fluctuations due to wealthier buyers being less sensitive to interest rate changes.
  • Affordable Areas: More affordable areas might see more activity as buyers seek value and opportunity.
  • Coastal vs. Inland: Coastal properties often command a premium, but inland areas might offer more space and affordability.

The Bottom Line

The Los Angeles housing market is currently in a state of transition. While prices haven't crashed, sales have slowed, and inventory is increasing. High mortgage rates and economic uncertainty are contributing factors.

The outlook for the rest of 2025 is cautiously optimistic. If mortgage rates stabilize and consumer sentiment continues to improve, we could see a more balanced market with opportunities for both buyers and sellers. But one thing's for sure, it's a changing market.

Los Angeles Housing Market Forecast: What's Next?

You're probably wondering what the future holds for the Los Angeles housing market. Well, based on the latest information, it looks like home values in the Los Angeles-Long Beach-Anaheim area might see a slight dip in the coming year. Right now, the average home value in this region is $983,438, and homes are going under contract in about 17 days (Zillow). Let's dive deeper into what the experts are predicting.

Near-Term Outlook: Spring and Summer 2025

Looking at Zillow's forecasts, we can get a clearer picture of where things might be headed in the short term.

  • May 2025 Prediction: The forecast suggests a slight decrease of 0.3% in home values in the Los Angeles area by the end of May 2025.
  • July 2025 Prediction: This trend continues slightly, with a predicted 0.6% decrease by the end of July 2025.

While these aren't huge drops, it indicates a potential cooling in the market over the next few months. This could mean a bit more breathing room for buyers, but sellers might need to adjust their expectations slightly.

The Year Ahead: April 2025 to April 2026

Now, let's look at the bigger picture. Zillow's one-year forecast from April 2025 to April 2026 predicts a further decrease of 1.2% in Los Angeles home values.

How Does Los Angeles Compare to Other California Markets?

It's always helpful to see how the Los Angeles housing market forecast stacks up against other major areas in California. Here’s a comparison based on Zillow's projections for the year ending April 2026:

California Region Predicted Change in Home Value (April 2025 – April 2026)
Los Angeles, CA -1.2%
San Francisco, CA -5.2%
Riverside, CA -0.1%
San Diego, CA -0.7%
Sacramento, CA -3.0%
San Jose, CA -3.8%
Fresno, CA -0.6%

As you can see, while Los Angeles is predicted to see a decrease, it's not as significant as some other expensive markets like San Francisco and San Jose. Riverside and Fresno are expected to see much smaller dips. This suggests that while the broader California market might be adjusting, the housing market in Los Angeles could be holding up relatively better.

Will Home Prices Crash in Los Angeles? What About 2026?

Based on the current data and forecasts, a housing market crash in Los Angeles seems unlikely in the immediate future. A gradual softening or correction appears to be the more probable scenario. Several factors contribute to this, including ongoing demand (despite high prices) and relatively limited inventory compared to previous downturns.

As for a specific Los Angeles housing market forecast for 2026, it's a bit too early to say with certainty. However, if the current trends continue, we might see a period of price stabilization or potentially a continued modest downward trend. Interest rates, economic growth, and inventory levels will be key factors to watch.

My Take on the Los Angeles Housing Market

From my perspective, the slight cooling in the Los Angeles real estate market could be a welcome sign for potential buyers who have been facing fierce competition and sky-high prices. It might offer a chance to enter the market with slightly less pressure. For sellers, it means being realistic about pricing and understanding that the rapid appreciation we've seen in recent years might be moderating.

It's crucial to remember that these are just forecasts, and the actual market can be influenced by many unexpected events. However, staying informed about these predictions can help both buyers and sellers make more informed decisions.

Should You Invest in the Los Angeles Real Estate Market in 2025?

Los Angeles has historically been a sought-after real estate market due to its desirable location, diverse economy, and strong demand for housing. Here are some key points to consider:

Market Stability

Los Angeles has a relatively stable real estate market with a history of consistent, long-term appreciation in property values. This stability is driven by factors such as the city's status as an economic hub, its thriving job market, and the limited supply of land for new construction. However, it's essential to note that like any market, there can be fluctuations, and past performance is not indicative of future results.

Property Appreciation

Over the long term, Los Angeles properties have typically appreciated in value. While there can be short-term fluctuations, investing with a long-term perspective can allow you to benefit from the city's overall property value growth.

Rental Income Potential

Los Angeles has a strong rental market, with a high demand for both single-family and multi-family rentals. This presents an opportunity for investors to generate rental income. However, rental income potential can vary depending on the neighborhood and property type.

Consideration for Property Type

Investors in Los Angeles can choose between single-family and multi-family properties. Single-family homes often provide more predictable rental income and potential for appreciation, while multi-family properties can offer multiple income streams but come with added management responsibilities.

The Housing Shortage Dilemma

Los Angeles is no stranger to the housing shortage dilemma. As its population continues to grow, driven by a robust job market and desirable lifestyle, the housing market struggles to keep pace. The consequences are multifold, affecting both renters and potential homeowners. High demand has led to escalating rental costs and home prices, making housing less affordable for many.

Investor's Paradise: The Demand-Supply Gap

For real estate investors, this gap between demand and supply represents a significant opportunity. The housing shortage has created a strong demand for rental properties, offering the potential for attractive rental income and return on investment. Here's why Los Angeles is an investor's paradise:

  • Rental Income: High demand for housing has driven up rental rates, providing investors with the prospect of steady rental income.
  • Property Appreciation: Despite the challenges, Los Angeles properties have shown a history of appreciating in value over the long term.
  • Population Growth: Los Angeles continues to attract new residents due to its economic opportunities and lifestyle. This demographic growth fuels the demand for housing.
  • Construction Gap: Construction in Los Angeles hasn't kept pace with population growth, intensifying the supply-demand imbalance.

Economic Diversity

Los Angeles is renowned for its economic diversity. The region's economy spans various sectors, including entertainment, technology, aerospace, healthcare, and tourism. The presence of major corporations, such as those in the entertainment and tech industries, has been a key driver of job creation and economic growth. The city's thriving tourism industry, centered around attractions like Hollywood and Disneyland, also plays a significant role in generating revenue and job opportunities.

Job Growth

Los Angeles has consistently experienced job growth, making it an attractive destination for job seekers. The city's diverse economic landscape provides opportunities in various fields. It is a hub for creative industries, with Hollywood serving as the epicenter of the global entertainment industry. Additionally, the tech sector has witnessed substantial growth in Silicon Beach, an area on the west side of Los Angeles, home to numerous tech startups and established companies.

The presence of educational institutions, including the University of California, Los Angeles (UCLA) and the California State University, Northridge, contributes to research, development, and a well-educated workforce. The healthcare sector, with renowned institutions like the Cedars-Sinai Medical Center, further drives job opportunities.

Population Growth

The Los Angeles Metropolitan Area's strong economy and job market have attracted a steady influx of residents. The population of the Los Angeles metro area is projected to be 12,598,000 in 2024, which is a 0.51% increase from 2023. However, the population of Los Angeles County is estimated to be 9,606,925 in 2024, which is a 0.58% decrease from the previous year.

The allure of the city's lifestyle, cultural diversity, and range of amenities has made it a magnet for people from various backgrounds. The region's population growth can be attributed to factors such as:

  • Job Opportunities: People move to Los Angeles in search of better job prospects and career growth.
  • Education: The presence of top-tier universities and educational institutions attracts students and faculty from around the world.
  • Cultural Attractions: The city's vibrant cultural scene, including theaters, museums, and art galleries, appeals to those seeking a rich cultural experience.
  • Quality of Life: Los Angeles offers a pleasant climate, beautiful landscapes, and recreational opportunities that enhance the quality of life.
  • Entertainment Industry: The allure of the entertainment industry draws aspiring actors, musicians, and filmmakers to Los Angeles.

As the population continues to grow, the demand for housing and services surges, creating a dynamic environment for real estate investors.

How to Invest in Real Estate in Los Angeles?

Investing in real estate in Los Angeles involves several steps:

1. Research the Market: Begin by thoroughly researching the Los Angeles real estate market. Analyze historical property values, rental trends, and the performance of different neighborhoods.

2. Financial Preparation: Ensure your financial situation is in order. This may include saving for a down payment, understanding your credit score, and securing financing.

3. Property Selection: Choose the type of property you want to invest in, whether it's a single-family home, multi-family building, or another type. Consider your investment goals and budget.

4. Location Matters: Location is critical in Los Angeles. Research neighborhoods and select areas with potential for growth and strong rental demand.

5. Property Management: Decide whether you'll manage the property yourself or hire a property management company. This choice may depend on the number of units and your experience.

6. Legal and Tax Considerations: Understand the legal and tax implications of real estate investing in Los Angeles. Consult with professionals if needed.

Single-Family Rental vs. Multi-Family Investment

When considering whether to invest in single-family or multi-family properties, it's essential to weigh the pros and cons of each:

Single-Family Rental:

  • Typically lower initial investment.
  • Easier property management.
  • Predictable rental income.

Multi-Family Investment:

  • Multiple income streams.
  • Potential for higher overall rental income.
  • More management responsibilities.

The choice between the two depends on your investment goals, budget, and willingness to manage the property. Both can be viable options in the Los Angeles market.

Maximizing Return on Investment

Investors looking to maximize their return on investment (ROI) in Los Angeles should consider the following strategies:

  • Location Selection: Carefully choose neighborhoods with strong rental demand and potential for property appreciation.
  • Property Type: Evaluate whether single-family or multi-family properties align with your investment goals and budget.
  • Property Management: Efficient property management can enhance ROI by reducing vacancies and maintenance costs.
  • Market Timing: Keep an eye on market trends and consider timing your investment to take advantage of favorable conditions.
  • Legal and Tax Considerations: Consult with legal and financial experts to ensure you're optimizing your investment from a legal and tax perspective.

California Housing Market: Forecast and Trends 2025-2026

by

Are you thinking about buying or selling a home in California? If so, you're probably wondering what's happening in the current California housing market. Well, here's the short answer: it's a bit of a mixed bag right now. While year-to-date sales are slightly up compared to last year, recent data reveals a slowdown in both sales and prices in May 2025, indicating some headwinds in the market.

Let's dive deeper into the trends and what they mean for you, whether you're a buyer, seller, or just curious about the Golden State's real estate scene.

Current California Housing Market Trends in 2025:

Home Sales: A Dip in May

Home sales in California have seen a decrease recently. According to the California Association of REALTORS® (C.A.R.), existing single-family home sales totaled 254,190 in May 2025, on a seasonally adjusted annualized rate. This represents:

  • A 5.1% decrease from April 2025 (267,710 homes sold)
  • A 4.0% decrease from May 2024 (264,850 homes sold)

The sales level in May was the lowest in the last four months and the biggest year-over-year decline since December 2023. While this might seem alarming, it's important to remember that year-to-date sales are still up 0.3% compared to the same period last year.

Comparison with National Home Sales

Nationally, the housing market is also experiencing some cooling.

  • According to the National Association of REALTORS® (NAR), home sales in the U.S. saw a 0.7% decrease year-over-year in May 2025 (down from 4.06 million in May 2024).

So, California's slowdown isn't happening in isolation. Economic uncertainties and mortgage rate fluctuations seem to be impacting the market nationwide.

Home Prices: Are They Dropping?

The median home price in California is a hot topic. While prices surged earlier, recent data suggests a slight pullback. In May 2025, the statewide median home price was $900,170. This is:

  • A 1.1% decrease from April 2025
  • A 0.9% decrease from May 2024 ($908,000)

C.A.R. attributes this dip to factors like elevated interest rates, concerns about insurance availability and affordability, economic uncertainty, and sellers being more willing to reduce prices.

Comparison with National Median Price

How does California compare to the rest of the country? The national median price in May 2025 was $422,800, with a year-over-year change of +1.3%. As you can see, California homes are significantly more expensive than the national average, so even a small price drop can be meaningful for buyers.

Housing Supply: More Homes on the Market

One piece of good news for buyers is that the housing supply in California is increasing. The Unsold Inventory Index (UII), which measures the number of months it would take to sell all homes on the market at the current sales rate, was 3.8 months in May 2025. This is up from:

  • 3.5 months in April 2025
  • 2.6 months in May 2024

Total active listings have increased by nearly 50% year-over-year and have been growing at a double-digit rate for the past 15 months. This means buyers have more choices and potentially more negotiating power.

Is It a Buyer's or Seller's Housing Market?

With increasing inventory and slightly declining prices, it might seem like California is shifting towards a buyer's market. However, the market dynamics vary by region and even by county. Some areas are still seeing price increases, while others are experiencing more significant declines.

Generally, a balanced market has a UII of around 5-6 months. A UII below that indicates a seller's market, while a UII above that suggests a buyer's market. California is inching closer to a balanced market, but it's not quite there yet.

Market Trends:

Let’s break down some key market trends that are shaping California's housing market:

  • Increased Inventory: As mentioned earlier, there are more homes available for sale, giving buyers more options and potentially reducing competition.
  • Slightly Decreasing Prices: While not a dramatic drop, the slight decrease in median home prices offers some relief for buyers who have been priced out of the market.
  • Rising Days on Market: Homes are taking longer to sell. The median number of days to sell a single-family home was 21 days in May 2025, up from 16 days in May 2024. This suggests that buyers have more time to consider their options and negotiate.
  • Variations Across Regions: The market is not uniform across the state. Some regions, like the Central Coast, are still seeing price increases, while others, like the San Francisco Bay Area, are experiencing declines.

Impact of High Mortgage Rates

Mortgage rates play a significant role in housing affordability and demand. As of June 26, 2025, the average 30-year fixed mortgage rate is around 6.77%, and the 15-year fixed-rate mortgage is about 5.89%, according to Freddie Mac.

These rates are considerably higher than the historically low rates we saw a few years ago. This has a direct impact on buyers' purchasing power and can lead to a slowdown in sales.

What the Experts are Saying

According to C.A.R. President Heather Ozur, “With home prices leveling off and more homes coming onto the market, it’s a great time for well-qualified buyers to enter the market. Lower prices are making homes more affordable, and the growing inventory means buyers have more choices. It’s a rare window where people can find their ideal home at a good value — making now an ideal time to buy.”

C.A.R. Senior Vice President and Chief Economist Jordan Levine adds, “Although the market has slowed in recent months, there’s potential for a rebound if economic concerns subside. Consumer sentiment appears to have bottomed out and is now showing signs of improvement, which could support a stronger housing market in the second half of the year. Buyers may take advantage of improved conditions, including deeper price reductions and increased housing inventory.”

Regional Snapshots: A Look at Different Areas in California

Let's break down some regional highlights based on the data provided by C.A.R.:

Region Median Price (May 2025) YOY Price Change Sales YOY Change Unsold Inventory Index (May 2025)
Central Coast $1,125,000 +6.2% -8.4% 4.1
Central Valley $510,000 +0.6% -5.2% 3.5
Far North $385,000 -3.8% +0.5% 5.3
Inland Empire $610,000 +1.9% -5.4% 4.5
Los Angeles Metro Area $855,000 +1.8% -8.3% 4.0
San Francisco Bay Area $1,400,000 -3.8% -8.2% 2.9
Southern California $888,000 +0.9% -7.6% 3.9

Key Takeaways and My Personal Opinion

The California housing market in June 2025 is a complex picture. Here are my thoughts on what's happening:

  • It's not a crash: While sales and prices have cooled off, it's not a dramatic collapse like we saw in 2008. The market is simply adjusting to higher interest rates and economic uncertainty.
  • Opportunity for Buyers: Increased inventory and slightly lower prices create opportunities for buyers who have been waiting on the sidelines. If you're financially prepared and have a long-term outlook, now might be a good time to start looking.
  • Realistic Expectations for Sellers: Sellers need to be realistic about pricing their homes. Overpricing can lead to longer days on market and potential price reductions. Working with an experienced real estate agent is crucial to navigating the current market conditions.
  • Local Expertise Matters: The California housing market is highly localized. What's happening in San Francisco might be very different from what's happening in San Diego. Rely on local real estate professionals for accurate and up-to-date information.

California Housing Market Forecast 2025-2026

California Housing Market Forecast 2025
Source: C.A.R.

The California‘s housing market forecast for 2025 anticipates a rise in both home sales and prices, with the median home price potentially reaching $909,400. This positive outlook is fueled by a projected improvement in housing supply and a more favorable interest rate environment, attracting more buyers and sellers back to the market.

A Brighter Outlook for California's Housing Market

Over the past few years, the California housing market has been a roller coaster ride. We've seen dramatic swings in interest rates, a shortage of homes available for sale, and a significant impact on affordability. However, based on recent data and projections, it seems that we are entering a period of relative stability and potential growth.

The California Association of Realtors (C.A.R.) has released its 2025 forecast, and the general consensus is optimistic. They project that existing single-family home sales will increase by 10.5% in 2025, reaching 304,400 units. This increase is a significant shift from the recent downward trends caused by high-interest rates and limited inventory.

Factors Driving the California Housing Market Forecast 2025

Several key factors are contributing to this projected growth in the California housing market:

  • Lower Interest Rates: The forecast predicts that the average 30-year fixed-rate mortgage will decline from 6.6% in 2024 to 5.9% in 2025. This reduction in borrowing costs will make it easier for buyers to qualify for a mortgage and could spark increased demand. I feel it's a great opportunity for first-time homebuyers to enter the market as it will bring the rates closer to pre-pandemic levels.
  • Improved Housing Inventory: Although the housing supply will still be below historical averages, there's an expectation of a moderate increase in active listings. Homeowners who were hesitant to sell due to the “lock-in effect” (when homeowners are hesitant to sell due to existing low interest rates) may be more inclined to list their homes as interest rates decrease and offer more selling flexibility.
  • Returning Buyers and Sellers: The combined effect of lower interest rates and a less restrictive inventory situation will likely lead to increased activity from both buyers and sellers.
  • Continued Demand: While the rate of price growth is projected to moderate, the demand for housing in California remains high. This strong demand, coupled with limited inventory, will continue to push prices upward.

The California Median Home Price Forecast

The C.A.R. forecast predicts the California median home price will increase by 4.6% to reach $909,400 in 2025. This is following a projected 6.8% increase in 2024 to $869,500 from the 2023 level of $814,000. While this signifies continued price growth, it's important to note that the pace of this growth is anticipated to be slower than in recent years.

My personal take on this is that the housing shortage will continue to impact affordability, even with the predicted increase in inventory. This continued shortage creates a competitive environment that will keep prices elevated in the majority of California's cities.

Housing Affordability: A Persistent Challenge

Housing affordability is a crucial issue for California residents, and the forecast suggests that it will remain a concern in 2025. The affordability index is projected to stay at 16%, meaning that the median-priced home is only affordable to 16% of households. It's a concern that needs to be addressed.

Economic Outlook and Impact on the California Housing Market

The California housing market is not isolated from broader economic trends. The forecast anticipates a slight slowdown in the U.S. and California economies in 2025.

  • GDP Growth: The U.S. GDP is projected to slow to 1.1% in 2025, compared to 1.9% in 2024.
  • Job Growth: California's nonfarm job growth is expected to decline to 1.1% in 2025 from 1.5% in 2024.
  • Unemployment Rate: California's unemployment rate is anticipated to tick up to 5.6% in 2025, compared to a projected 5.4% in 2024.

However, the economic outlook is still considered relatively healthy, which should provide support to the housing market.

California Housing Market Forecast 2025: Historical Data

Here is a table that outlines the key metrics of the California housing market over the past few years and the projections for the coming years.

Year SFH Resales (000s) % Change Median Price ($000s) % Change Housing Affordability Index 30-Yr FRM
2018 402.6 -5.2% 569.5 5.9% 28% 4.50%
2019 398 -1.2% 592.4 4% 31% 3.90%
2020 411.9 3.5% 659.4 11.3% 32% 3.10%
2021 444.5 7.9% 784.3 18.9% 26% 3.00%
2022 343 -22.9% 822.3 4.5% 19% 5.30%
2023 257.9 -24.8% 814.0 -1% 17% 6.80%
2024p 275.4 6.8% 869.5 6.8% 16% 6.60%
2025f 304.4 10.5% 909.4 4.6% 16% 5.90%

The California housing market forecast for 2025 indicates a potential rebound in both sales and prices. The projected improvement in inventory and lower interest rates is likely to attract more buyers and sellers. While the pace of price growth is expected to slow down, the underlying demand and limited supply conditions will likely continue to put upward pressure on home prices.

I believe that 2025 could present both challenges and opportunities for those looking to buy or sell in the California housing market. It's crucial to stay informed about current market conditions and to consult with real estate professionals to make well-informed decisions.

What to Expect in the California Housing Market in 2025?

1. Mortgage Rates Will Play a Key Role

  • The recent dip in interest rates has been a breath of fresh air for buyers.
  • While no one can predict the future with certainty, most experts believe rates will remain relatively stable for the rest of the year, hovering around the 6-7% range.
  • This could incentivize more buyers to enter the market, especially if prices continue to moderate.

2. Inventory Will (Slowly) Improve

  • The increase in active and new listings is a positive sign.
  • However, don't expect a sudden surge in inventory. California has a chronic undersupply of housing, and it will take time to bridge the gap.

3. Price Growth Will Continue, But at a Slower Pace

  • Double-digit price appreciation is likely a thing of the past (for now, at least).
  • Most analysts predict more sustainable, single-digit price growth for 2025.
  • Don't expect a crash – the fundamentals of the California economy remain strong, supporting continued demand for housing.

4. Regional Variations Will Persist

  • As always, California's vastness means there's no one-size-fits-all trend.
  • The Bay Area, with its robust tech sector, will likely continue to see strong demand, even with some cooling.
  • Coastal communities, highly desirable for their lifestyle, will also remain competitive.

Related Articles:

Mortgage Rates Today June 26, 2025: A Significant Drop in 30-Year Fixed Rate

by

Today's average 30-year fixed mortgage rate has seen a notable decrease, dropping to 6.81% from 6.82%, which marks a decline of 1 basis point from the previous day. More importantly, this rate has reduced by 10 basis points from last week’s average of 6.91%. This change presents an exciting opportunity for potential homebuyers and those looking to refinance their mortgages.

Mortgage Rates Today June 26, 2025: A Significant Drop in 30-Year Fixed Rate

Key Takeaways

  • 30-Year Fixed Rate: Currently at 6.81%, down from 6.91% last week.
  • 15-Year Fixed Rate: Decreased slightly to 5.85%.
  • Current Refinance Rate: 30-year fixed refinance rates fell to 7.03%.
  • Economic Influences: Inflation, investor sentiment, and Federal Reserve policies heavily influence mortgage rates.

Understanding today's mortgage rates is crucial for borrowers, especially given the current state of the economy and housing market.

Current Mortgage and Refinance Rates Overview

To better understand the trends, here’s a snapshot of the current mortgage rates as of June 26, 2025:

Mortgage Type Current Rate 1 Week Change APR 1 Week Change
30-Year Fixed Rate 6.81% Down 0.11% 7.22% Down 0.15%
15-Year Fixed Rate 5.85% Down 0.12% 6.12% Down 0.15%
20-Year Fixed Rate 6.65% Up 0.07% 6.94% Down 0.01%
5-Year Adjustable Rate Mortgage 7.63% Up 0.43% 7.92% Up 0.13%
30-Year FHA Rate 7.17% Down 0.16% 8.20% Down 0.16%
30-Year VA Rate 6.27% Down 0.14% 6.49% Down 0.12%
30-Year Jumbo Rate 7.27% unchanged 7.73% Up 0.06%

Source: Zillow

Economic Factors Influencing Mortgage Rates

Several factors contribute to the current state of mortgage rates. Understanding them can help potential borrowers navigate their decisions.

  1. Inflation: The Federal Reserve's actions to combat inflation have a direct impact on mortgage rates. By raising interest rates, the Fed aims to control economic growth and stabilizes prices. This approach can increase mortgage rates as lenders adjust to anticipated economic conditions.
  2. Economic Uncertainty: This term encompasses current crises, ranging from geopolitical tensions to domestic economic challenges. Uncertainty often leads investors to seek safer investments, which can pressure mortgage rates upward.
  3. Investor Sentiment: The perception of economic stability influences Treasury bond yields. When confidence wanes, investors demand higher yields on bonds, which leads to increased mortgage rates.
  4. Federal Reserve Policy: Adjustments made by the Federal Reserve in monetary policy play a crucial role. Their decisions regarding interest rates and growth projections can send ripples throughout the lending market.
  5. Labor Market Conditions: The job market affects borrowing power. A tight labor market may lead to wage increases, prompting more aggressive Federal Reserve actions to control inflation, which could raise mortgage rates.
  6. Housing Supply and Demand: The balance of housing supply versus demand can also influence rates. If demand for homes continues to outpace supply, it can maintain upward pressure on both home prices and mortgage rates.
  7. Market Trends: Seasonal factors often influence the housing market. For instance, the spring and summer months commonly see increased buying activity, which can push rates up. Conversely, rates may stabilize or decrease during the winter months when demand typically dips.

Understanding Monthly Payment Calculations

Understanding how the current mortgage rates affect monthly payments can help buyers and homeowners make informed decisions. Let’s explore how the current rates influence monthly payments for different loan amounts:

Monthly Payment on a $300,000 Mortgage

With the current 30-year fixed mortgage rate of 6.81%, a potential borrower will have a monthly payment of approximately $1,943. This estimate includes principal and interest but does not encompass additional costs like property taxes and homeowners insurance, which can significantly affect the total monthly obligation.

Monthly Payment on a $400,000 Mortgage

For a $400,000 mortgage at the same 30-year fixed rate, the monthly payment would be around $2,591. This amount further illustrates how quickly mortgage payments can escalate as loan amounts increase, emphasizing the need for buyers to evaluate their financial situations carefully.

Monthly Payment on a $500,000 Mortgage

If you seek financing for a $500,000 mortgage, your anticipated monthly payments under the current rate would be about $3,239. Understanding this helps borrowers recognize the long-term financial commitment associated with larger loans and the importance of budgeting accordingly.

These amounts account for principal and interest alone, so it is vital to remember that property taxes, homeowners insurance, and potentially private mortgage insurance (PMI) will add to these monthly costs.

Current Mortgage Refinance Rates

Refinancing is an option many homeowners are considering as rates dip slightly. The current average 30-year fixed refinance rate has dropped to 7.03%, down from 7.08% just a week ago. This represents a key opportunity for homeowners who may want to capitalize on lower annual percentage rates. Here’s how current refinance rates compare:

Refinance Program Current Rate 1 Week Change
30-Year Fixed Rate Refinance 7.03% Down 0.05%
15-Year Fixed Rate Refinance 5.95% Down 0.01%
5-Year Adjustable Rate Refinance 7.87% Down 0.01%

Source: Zillow

Refinancing can serve various purposes: lowering monthly payments, consolidating debt, or tapping into home equity for significant expenses. However, it is essential to consider the costs associated with refinancing, such as closing costs, to assess whether it is a financially sound decision.

Homebuyer Sentiment and Economic Outlook

The economic outlook significantly impacts buyer sentiment, directly correlating to mortgage rates. According to the National Association of REALTORS® Chief Economist Lawrence Yun, there’s reason for cautious optimism regarding the housing market. Yun forecasts a 6% increase in existing home sales for 2025, rebutting the concerns of stagnation during economic downturns. He suggests that even amid economic uncertainty, the demand for housing will persist.

Additionally, Yun predicts an average mortgage rate of 6.4% in the latter part of 2025 and a further dip to 6.1% in 2026. These rates could be considered ideal for buyers looking to enter the housing market soon. A favorable borrowing environment would likely stimulate home purchases and provide relief to prospective investors looking for opportunities within the housing sector.

Several reports suggest slowing but steady improvements in the housing market. The Mortgage Bankers Association expects rates to remain fluctuating in the mid-6% range throughout 2025, settling around 6.7% by year-end. This prediction offers a window for buyers who may want to time their purchases strategically.

In contrast, Freddie Mac anticipates heightened purchase and refinance volumes due to these adjustments, indicating that potential buyers and homeowners' motivations remain strong. With the ongoing volatility in market conditions, it remains critical for buyers to stay informed about future trends and evaluate their options carefully.

Summary:

As we unpack the current mortgage rates on June 26, 2025, we can identify several pivotal shifts within the housing market. The decrease in the 30-year fixed rate provides fresh opportunities for both homebuyers and those considering refinancing existing loans. While rates remain elevated, particularly around 7% in select categories, these emerging trends indicate that market conditions may improve.

With predictions of an upward trend in home sales and potential future declines in mortgage rates, those looking to enter the housing market should remain assertive in their search for ideal loan options. Borrowers must consider all aspects of their financial situations.

Invest Smarter in a High-Rate Environment

With mortgage rates remaining elevated this year, it's more important than ever to focus on cash-flowing investment properties in strong rental markets.

Norada helps investors like you identify turnkey real estate deals that deliver predictable returns—even when borrowing costs are high.

HOT NEW LISTINGS JUST ADDED!

Connect with a Norada investment counselor today (No Obligation):

(800) 611-3060

Get Started Now 

Also Read:

Today’s 5-Year Adjustable Rate Mortgage Takes a Big Jump – June 26, 2025

by

Are you in the market for a new home or considering refinancing? If so, keep a close eye on mortgage rates! According to Zillow, the 5-year Adjustable Rate Mortgage (ARM) has seen a significant jump today, June 26, 2025, increasing by 15 basis points to 7.71%. This increase could impact your affordability and overall borrowing strategy; let's dive into what this means for you.

Today's 5-Year Adjustable Rate Mortgage Takes a Big Jump of 15 Basis Points – June 26, 2025

Mortgage rates are constantly in flux, influenced by a myriad of economic factors. While the 30-year fixed rate is considered the benchmark, other loan products like ARMs provide different options that can be advantageous depending on your circumstances.

Here’s a snapshot of how various mortgage rates are behaving today:

  • 30-Year Fixed Rate: Down 1 basis point to 6.81%
  • 15-Year Fixed Rate: Down 2 basis points to 5.85%
  • 5-Year ARM: Up 15 basis points to 7.71%

This mixed bag of movements suggests that while long-term borrowing costs are slightly decreasing, shorter-term adjustable rates are heading in the opposite direction, potentially raising concerns for borrowers banking on rate stability.

Why the Sudden Jump in the 5-Year ARM Rate?

Several factors could be contributing to this uptick. Here are some potential drivers:

  • Shifts in the Yield Curve: The yield curve, reflecting the difference between short-term and long-term treasury yields, influences mortgage rates. A steepening curve might signal higher inflation expectations, pushing ARM rates up.
  • Federal Reserve Actions: While the Fed doesn’t directly set mortgage rates, its monetary policy decisions impact the broader interest rate environment. Any signals of tightening could lead to increases in ARM rates.
  • Investor Sentiment: Demand for mortgage-backed securities (MBS), which bundle mortgages together, also plays a role. If investors are less willing to buy MBS due to perceived risk, lenders may increase rates to compensate.
  • Economic Data Releases: Strong economic reports suggesting robust growth may encourage lenders to increase the rates they offer.

Comprehensive Mortgage Rate Overview (June 26, 2025)

To give you a complete picture, here's a detailed table comparing different loan types and their current rates from Zillow:

Conforming Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate 6.81% down 0.10% 7.25% down 0.13%
20-Year Fixed Rate 6.65% up 0.07% 6.94% down 0.01%
15-Year Fixed Rate 5.85% down 0.11% 6.13% down 0.13%
10-Year Fixed Rate 5.85% down 0.08% 6.04% down 0.03%
7-year ARM 7.44% 0.00% 8.02% up 0.20%
5-year ARM 7.71% up 0.51% 7.98% up 0.18%
3-year ARM — 0.00% — 0.00%

Government Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate FHA 6.88% down 0.45% 7.91% down 0.46%
30-Year Fixed Rate VA 6.29% down 0.12% 6.51% down 0.10%
15-Year Fixed Rate FHA 5.63% up 0.03% 6.59% up 0.03%
15-Year Fixed Rate VA 5.84% down 0.08% 6.20% down 0.05%

Jumbo Loans

PROGRAM RATE 1W CHANGE APR 1W CHANGE
30-Year Fixed Rate Jumbo 7.28% up 0.01% 7.73% up 0.06%
15-Year Fixed Rate Jumbo 6.95% up 0.35% 7.27% up 0.42%
7-year ARM Jumbo 7.42% down 0.10% 8.00% down 0.06%
5-year ARM Jumbo 7.71% down 0.01% 8.02% down 0.07%
3-year ARM Jumbo — 0.00% — 0.00%

What This Means for Homebuyers and Refinancers

The rate hike on the 5-year ARM has several implications:

  • Higher Initial Payments: Borrowers opting for a 5-year ARM will face higher initial monthly payments compared to the rate environment just yesterday. The initial attraction to ARM’s comes from a lower initial interest when compared to fixed mortgages but is diminished as the rates go up in subsequent years
  • Increased Risk: ARMs come with the risk that interest rates could rise after the initial fixed-rate period, potentially leading to significant increases in monthly payments. This risk needs careful consideration.
  • Impact on Affordability: For potential homebuyers, especially those on a tight budget, the higher ARM rate could reduce the amount they can borrow or qualify for.
  • Refinancing Considerations: Homeowners considering refinancing from a fixed-rate mortgage to an ARM need to weigh the potential savings against the risk of future rate increases.

Is an ARM Still the Right Choice?

Even with the rate increase, an ARM could still be a suitable option for certain borrowers:

  • Short-Term Homeowners: If you plan to move or refinance within the next five years, an ARM might offer lower rates during your ownership period.
  • Expectation of Decreasing Rates: Some borrowers might believe that interest rates will decline in the future, making an ARM a potentially beneficial bet. I would suggest not trying to time the market for that reason as there is no surety.
  • Financial Flexibility: If you have the flexibility to absorb potential rate increases, an ARM could still save you money in the short term. Flexibility here refers to that you should be ready in case the interest surges to a point you are not able to afford anymore to offset the monthly liability.

Fixed-Rate Mortgages: A Safe Haven?

While ARMs flirt with potential savings and risks, fixed-rate mortgages offer stability, especially now. With rates for 30-year and 15-year fixed mortgages showing slight decreases, they could be an attractive alternative for those seeking predictability in their monthly payments. The current 30-year fixed rate sits at 6.81%, a good option for stability in the long run.

Strategies to Navigate the Current Mortgage Rate Climate

  • Shop Around: Don't settle for the first rate you see. Get quotes from multiple lenders to find the best deal.
  • Improve Your Credit Score: A higher credit score can result in lower interest rates. Work on paying bills on time and reducing your debt.
  • Increase Your Down Payment: A larger down payment reduces the loan amount and could qualify you for a lower rate.
  • Consider Points: Paying points upfront can lower your interest rate. Calculate whether the upfront cost is worth the long-term savings.
  • Consult a Mortgage Professional: A mortgage broker can guide you through the options and help you make an informed decision.

The Bottom Line: Stay Informed and Adapt

The mortgage market is dynamic, and rates can change quickly. Staying informed about the latest trends and understanding how they impact your financial situation is crucial. Whether you're a first-time homebuyer, a seasoned homeowner looking to refinance, or an investor, careful planning and a well-thought-out strategy are essential to securing the best possible mortgage terms.

I'd advise approaching any mortgage decision with caution and diligence. Understanding your risk tolerance, financial goals, and the potential impact of rate changes is key to making the right choice for your future.

Capitalize on ARM Rates Before They Rise Even Higher

With fluctuating adjustable-rate mortgages (ARMs), savvy investors are exploring flexible financing options to maximize returns.

Norada offers a curated selection of ready-to-rent properties in top markets, helping you capitalize on current mortgage trends and build long-term wealth.

HOT NEW LISTINGS JUST ADDED!

Connect with an investment counselor today (No Obligation):

(800) 611-3060

Get Started Now

Blog Posts

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB