Mortgage rates are finally showing signs of relief, though not the dramatic drop many buyers have been waiting for. According to Freddie Mac, the national average for a 30-year fixed mortgage is hovering around 6.17%, down from the 7% range we saw earlier this year. Locally, Wells Fargo is quoting jumbo 30-year fixed loans near 6% for Los Angeles County.
Why Rates Are Easing
The shift comes as inflation continues to cool and the Federal Reserve has cut rates twice this year. However, mortgage rates are tied more closely to long-term Treasury yields than to the Fed’s short-term rate, and those yields remain volatile. After the Fed’s latest cut in late October, yields briefly dipped but then climbed again as investors questioned whether more cuts are coming. As a result, mortgage rates have improved but remain cautious, generally sitting between 6.0% and 6.5%.
What This Means for the South Bay Market
In high-value coastal markets like the Sand Section, even a small rate change can make a big difference. A drop of just a quarter of a point can translate into hundreds of dollars in monthly savings on multimillion dollar loans. For buyers, this easing could create a small window of opportunity before competition increases. For sellers, slightly lower rates may bring more motivated buyers into the market, especially if rates dip under the 6% threshold, which remains a key psychological marker for many.
What to Expect in the Months Ahead
Most economists expect mortgage rates to stay in the 6.0 to 6.5% range through early 2026, with a few optimistic forecasts suggesting rates could reach the high 5% range if inflation continues to decline. While we may see modest improvement, experts agree that the ultra-low 3–4% rates of the past are unlikely to return soon. Instead, the current market appears to be settling into a new normal.
Our Take
For Buyers: If the numbers work, this is a reasonable time to move forward. Waiting for rates to drop significantly could mean missing opportunities as inventory tightens or home prices rise again. Explore both fixed and adjustable options to see what best fits your plans.
For Sellers: Price strategically and highlight the lifestyle value your property offers. As affordability improves slightly, well-presented and well-priced homes will continue to stand out.
For Everyone: Keep an eye on upcoming economic reports. Mortgage markets react quickly to shifts in inflation data and Federal Reserve policy, and timing a purchase or refinance around those moves can pay off.
In short, rates are trending in the right direction but remain in a holding pattern. The South Bay market continues to show resilience, and with buyers gaining a bit more purchasing power, we expect to see a steady, balanced close to 2025.
