For homeowners in Brentwood, there’s a key mortgage rate that could motivate them to sell and buy again: 5.5%. According to a survey by John Burns Research and Consulting (JBREC), this rate is a crucial tipping point for many homeowners considering making a move in the competitive Los Angeles real estate market.
Key Findings from the JBREC Study:
- 71% of homeowners planning to purchase their next home with a mortgage are unwilling to accept a rate above 5.5%.
- 62% of consumers believe a historically normal mortgage rate is below 5.5%, reflecting a perception that rates above this figure are too high for comfort.
- Only 13% of homeowners are willing to accept a mortgage rate between 6.5% and 6.99% when buying their next home.
Why Does the 5.5% Mortgage Rate Matter for Brentwood Homeowners?
In the high-demand Brentwood area, where property values are among the highest in Los Angeles, mortgage rates play a crucial role in both buying and selling decisions. Many homeowners in 90049 are locked into low-interest mortgages from previous years, making them hesitant to sell and take on a higher rate. However, the study suggests that when rates drop to 5.5%, a significant portion of homeowners would be more likely to sell their current homes and make a new purchase.
This threshold is particularly important in affluent neighborhoods like Brentwood, where buyers are often more sensitive to rate changes due to the larger loan amounts typically required.
The Lock-In Effect: How It’s Impacting Brentwood Listings
The lock-in effect—where homeowners stay put to avoid trading their low mortgage rate for a higher one—has kept housing inventory low in Brentwood. However, as JBREC points out, this trend is starting to shift, with more homes coming onto the market as rates hover near 6%.
While homeowners are still cautious about selling in the current market, the study offers clarity on when they may feel more comfortable moving: when mortgage rates drop closer to 5.5%. As forecasts suggest rates could fall below 6% by 2025, it’s expected that more Brentwood homeowners will list their properties for sale, providing more opportunities for buyers in this coveted neighborhood.
What Does This Mean for Buyers and Sellers in Brentwood?
For Brentwood buyers, this means that while inventory might be tight for now, there could be more homes hitting the market as mortgage rates approach 5.5%. This could be the right time to start your home search, especially if you’re looking for properties in this highly desirable 90049 zip code.
For sellers, understanding this 5.5% mortgage rate threshold can help you time your sale. If you’re considering selling your Brentwood home, it may be advantageous to wait until rates come down, increasing the pool of motivated buyers willing to make a purchase.
Our Take on the Brentwood Market in 2024 and Beyond
The Brentwood real estate market is unique due to its high property values and affluent buyer base. While the broader Los Angeles market is experiencing shifts, Brentwood homeowners may be more influenced by rate changes due to the larger mortgage amounts required.
JBREC’s study provides valuable insight into the tipping point for when homeowners might feel comfortable selling and buying again. Although 5.5% is a useful benchmark, it’s not a fixed rule. If forecasts predicting a drop in rates below 6% hold true, the Brentwood market could see more activity by 2025.
Until then, if you’re considering making a move in Brentwood, working with a knowledgeable local real estate agent who understands the nuances of this exclusive market will give you a significant edge.
Ready to Buy or Sell in Brentwood (90049)?
Whether you’re looking to buy a luxury home or sell your property in Brentwood, it’s important to stay ahead of the market trends. Reach out to a seasoned Brentwood real estate agent today to discuss how current mortgage rates impact your buying or selling strategy in the 90049 area.
Contact Brentwood Los Angeles Luxury Real Estate Broker Abdo Pierre Faissal at Nourmand & Associates for more information 310-620-1038 / [email protected]