The real estate market throughout the United States has experienced unprecedented volatility due to the COVID-19 pandemic. Although a portion of this can be attributed to the evolution of consumer preferences and the economic downturn, the prevalent cause of the United States real estate boom was the historically low mortgage interest rates. Therefore, to make a financially educated decision on whether now is the right time to invest in West LA homes, it is crucial to gather context on how and why California interest rates are what they currently are.
Historically low mortgage interest rates
Economic factors that influence interest rates
The United States has not seen this level of inflation since the 1980s, and the combination of low mortgage rates is incredibly rare. Though this is only temporary, it does make borrowing more attractive at the present moment.
Economic recovery will increase rates
Federal officials forecast three rate hikes to a 0.9% increase by the end of the year and a reduction of bond-buying by March. Earlier projections had one rate hike and a benchmark of 1.8% by 2024, rather than the now projected 2.1%. These increases signal to those buying West LA homes that right now is the most opportune time to explore the market and take advantage of these temporarily advantageous conditions before they end.
How do the interest rates impact the quality of a West LA homeowner’s investment?
Los Angeles has a property appreciation rate that amounts to approximately 13.4% annually, according to Norada. Another source, NeighborhoodScout, estimates a 6.13% average annual appreciation rate, whereas the total appreciation for Los Angeles homes since 2000 was reported to be as high as 264.61%. Even with the pandemic slowdowns, prices have risen steadily and shown West LA homes to be a sound investment.
Mortgage interest rates have never been in a more unique position than during this pandemic. The historic lows, slow increases, and current high inflation are great reasons to explore your real estate options no matter your location. These economic factors, the attractive local housing market due to the pandemic, and resilient high appreciation values in West LA present significant motivations to invest in West Los Angeles property. If you’re ready to take the next step and begin shopping for West LA homes, reach out to trusted local agent David Dippong for guidance.