Inflation is Cooling, Mortgage Rates Spike
Federal Reserve (Fed) voted to raise interest rates for the 11th time last month by .25% as inflation showed signs of cooling, as the CPI(Consumer Price Index) rose 3.2% in July,which was lower than expected. The Fed did not show any clear signs if there will be a pause in the coming months, but more details should come out at the hallowed annual Economic Symposium in Jackson Hole next week.
The big news is mortgage rates, which spiked to the highest level in decades last week. (Mortgage rates are based on the 10 year Treasury rate) In early August, Fitch, the bond rating agency, downgraded US debt from AAA to AA+. The Fitch announcement that it may have to downgrade many regional banks this week spooked the bond market with the 10 year Treasury spiking to 4.16% as compared to last year's 2,87%. This is wreaking havoc on mortgage rates as they are now hovering around 7.37% for a 30 year fixed rate mortgage.
Nationally the overall stats are showing that the number of homes for sale has decreased by 6.4% and that prices are up over last year with over 35% of homes taking price reductions. Locally, still very low inventory levels, as compared to last year. Check out the chart below..... Despite low inventories we are still looking at, mostly, lower to negative price gains for the rolling three month period.
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Single family home prices(median) for May 2023-July 2023:
| Glendale | + 3.6% |
| Burbank | - 1.2% |
| Toluca Lake* | - 15.7% |
| Pasadena | + 1.5% |
| Studio City | - 1.5% |
| Hollywood Hills* | + 17.9% |
| Valley Village | - 13.7% |
| Sherman Oaks | - 7.7% |
| Woodland Hills | - 6.5% |
are somewhat misleading
Weekly national mortgage rates for loans under $400,000, top credit scores:
| 30 yr. fixed rate | 6.96 | ||
| 15 yr. fixed rate | 6.30 | ||
