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Looking to buy or sell a home this spring? Here's what to expect

Andrew Khouri, Los Angeles Times on

Published in Business News

Spring is less than a month away, and with it typically comes a busy time to buy and sell a home in Southern California.

The holidays have passed. The weather is warmer. At least in theory, families should have enough time to find a home, move and settle in before their children start school in the fall.

But during four years of a pandemic-influenced market, seasonality has at times gone by the wayside and home prices have whipsawed up, down, then back up again.

So what should you expect if you are looking to buy or sell a home this spring?

Borrowing costs

If you are buying a home, prepare to pay a high mortgage interest rate.

 

Prospective buyers had received some good news in recent months as the average rate on a 30-year fixed mortgage fell from a high of 7.79% at the end of October to 6.6% in January.

Mortgage interest rates tend to follow inflation and during that time inflation showed signs of easing. But in recent weeks, economic reports have signaled inflation may be harder to eradicate than some expected and mortgage rates have resumed their climb.

As of last week, the average rate on a 30-year fixed mortgage was 6.9%, according to Freddie Mac. That means the monthly payment on an $800,000 house is $128 more a month than that bottom in January, but $387 cheaper than the peak in October.

According to the latest forecast from the Mortgage Bankers Assn., buyers shouldn't expect drastic relief this year. The trade group expects rates to average 6.6% during the second quarter and end the year at 6.1%.

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