They say the early bird catches the worm, and that couldn’t be truer of this year’s frenzied housing market.
A recent Redfin analysis determined that April was the most affordable month to purchase a home in Los Angeles this year, with a median monthly mortgage payment of $2,382. Redfin came to this conclusion by evaluating the average monthly mortgage rate, the median monthly list price, and the median monthly mortgage payment based on that amount.
Although mortgage rates have continued to sink to record lows throughout the year, the Los Angeles metro area’s median home price has risen 12.4 percent since the pandemic began in March. Those who emerged from lockdown ready to buy in April benefited from curtailed competition and lower prices — the typical home sold for $80,000 less than it did in November, according to data from the California Association of Realtors (CAR).
That being said, home shoppers in Los Angeles County were limited to touring only vacant properties due to a ban on in-person showings and open houses instituted by Mayor Eric Garcetti. To step foot inside an occupied property listed for sale, you had to first submit an offer with a check placed in escrow. While these tight restrictions lasted for only a few weeks, they caused home sales to plummet 35.2 percent in April.
The next-best month for purchasing a home was November, when the average mortgage rate tumbled to an all-time low of 2.77 percent. The median monthly mortgage payment last month amounted to $2,453 in Los Angeles, about 3 percent higher than April.
Unfortunately, it wasn’t a great month for inventory as rising COVID-19 cases and the start of the holiday season caused fewer homeowners to list their properties for sale. Unsold inventory stood at 2.1 months of supply in November, and the median home spent just nine days on the market, creating fierce buyer competition.
“The good news for those buyers who are persevering through a dearth of homes for sale and fierce bidding wars is that once you do land a home, today’s sub-3% mortgage rates are largely canceling out the high prices,” said Redfin chief economist Daryl Fairweather.