Mortgage interest rates doubled last year, sharply reversing 2021 record lows. That left many Californians letting go of their homeownership dreams.
Why now
California’s housing market is the most unaffordable it’s been in the last decade. More people than ever are moving out of state to pursue lower housing costs.
The backstory
In 2021, historically low mortgage rates allowed Californians to seek out homes that would normally be too expensive. But in 2022, the Federal Reserve campaigned to address high inflation by hiking interest rates, doubling the cost of obtaining new mortgages. As a result, an estimated 400,000 Californians no longer qualified.
Listen to the conversation
Our LAist 89.3 talk show AirTalk spoke to Tressa Pope, a Los Angeles-area mortgage broker and founder of TPG Mortgage Lending, Logan Mohtashami, lead analyst for the real estate news site HousingWire, and Orphe Divounguy, senior economist with Zillow about the current state of affairs.
Listen: The state of mortgages for SoCal homebuyers
What’s next
Mortgage interest rates are expected to drop again later this year, but not to the historic lows of 2021. However, the supply of affordable housing remains limited.
Tips
- Down payment assistance programs are available for low and middle income first time homebuyers in the Los Angeles area. Pope recommends that those applying to assistance programs have a few months of mortgage payments saved.
- The statewide California Dream For All down payment program will launch in March, putting $300 million…
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