On September 16 the Federal Reserve raised the federal funds rate for the first time since 2023, and mortgage rates went right along with it. Freddie Mac put the 30-year fixed at 6.95% on September 17, up from 6.76% the week before. Daily lender surveys have been sitting around the 7% line since. A year ago that same rate was closer to 6.26%.
Every time rates move, I watch the same thing happen. Both sides of the transaction dig in, each convinced the other is being unreasonable. Sellers price like it's 2021. Buyers submit offers like they're expecting a fire sale. Then nothing closes, and everybody blames the market.
After more than $11M in transactions across Los Angeles, here's what I've learned: deals in a market like this happen when each side understands something about the other.
Sellers: Respect What Buyers Can Actually Afford
This is the part that's hard to hear. Your home didn't get less valuable when rates went up. But the pool of people who can afford it got smaller, and that has real consequences for how you price.
Run the math honestly. On a $1,000,000 loan, the difference between 6.25% and 7% is roughly $500 a month. That's $6,000 a year out of a buyer's budget, every year, for thirty years. A buyer who qualified for your asking price last spring may not qualify for it today. That's not them lowballing you. That's arithmetic.
What I see work: pricing accurately from day one instead of testing an aspirational number. In 2021 an overpriced listing got corrected by a bidding war within a week. That doesn't happen now. It sits, goes stale, accumulates days on market, and eventually sells for less than a well-priced listing would have. The market punishes optimism slowly and expensively.
The other lever most sellers overlook is a rate buydown. Contributing toward buying down a buyer's rate often costs you less than an equivalent price reduction, and it moves their monthly payment more. If affordability is what's blocking the deal, address affordability directly.
Buyers: Sellers Aren't Giving Away Their Homes
Now the other side. There's a lot of talk right now about a crash, and some buyers are waiting for distressed sellers to hand them a discount. I understand the instinct. It's also not what this market is.
A price collapse requires sellers who have to sell. That's what 2008 was: too much inventory, too many people underwater on loans they never should have qualified for, and forced sales stacking up. Today is close to the opposite. Homeowners sitting on 3% mortgages have zero interest in trading them for 7%, so most of them simply aren't moving. Inventory stays tight. Lending standards since 2008 are dramatically stricter, so the owners who do hold mortgages are far better qualified than the 2006 cohort.
What that means practically: the seller across the table has equity, a cheap mortgage, and no obligation to move. They are not under pressure. An offer built on the assumption that they're desperate doesn't get countered. It gets ignored.
The good news is that your position is genuinely better than it was three years ago, just not in the way a crash would deliver. Competition has thinned out considerably. Contingencies are back. Inspections get honored. In Mar Vista, Culver City, and Baldwin Hills, properties sit long enough for you to actually think before you write.
- Shop several lenders. Quotes differ meaningfully between lenders on the same day for the same borrower. Gather estimates within 24 hours of each other so the comparison is real.
- Ask for a seller-paid buydown rather than leading with a big price cut. Sellers often say yes to one and no to the other.
- Know your break-even on points. They only pay off if you hold the loan long enough to recover the upfront cost.
Where Deals Actually Get Made
The transactions I'm closing right now all look similar. The seller prices to what the current buyer pool can carry instead of what a neighbor got two years ago. The buyer accepts that a fair price today still reflects real equity and real demand. Somebody brings up a rate buydown, and suddenly the gap that felt like $75,000 turns out to be a structuring problem rather than a values problem.
Nobody knows where rates go next, and anyone claiming otherwise is guessing. The Mortgage Bankers Association expects them to hold near current levels, but that shifts with every inflation print and Fed decision. What I'd tell any client is to decide on your own timeline and your own numbers. If the home works and the payment works, the rate is something you can revisit through a refinance later. The price you agree to is permanent.
Every situation is different and none of this is financial advice. If you want to run real numbers on a specific property or neighborhood, that's a conversation worth having.