Let’s take a look at rising interest rates and their impact on the Los Angeles Real Estate Market. We will assume a $1,000,000 purchase price with a 20% down payment of $200,000.
Interest Rate: 3%
Mortgage Payment: $3,373
LA County Property Taxes: $1,042
Estimated Insurance: $150.00
Total monthly payment: $4565
When I spoke with Arin at House America last week, he quoted me a 5.875% rate.
Interest Rate: 5.875%
Mortgage Payment: Principal and Interest: $4,732
LA County Property Taxes: $1,042
Estimated Insurance: $150.00
Total monthly payment: $5,924
Rising interest rates and their impact have resulted with many home buyers now priced out of the market. We saw this first hand when reviewing offers on our Orange Knoll listing in La Canada. The most recent .75% interest rate hike happened during the counter offer period. Therefore, the rate spike impacted the counter offers for the buyers with smaller down payments.
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