📊 March 2025 Housing Insight | Source: ResiClub
Despite higher mortgage rates and home prices, American homeowners are in much better shape financially than most people realize. In fact, homeowners are currently spending less of their disposable income on mortgage payments than they did before the 2008 housing crash.
According to a new ResiClub report, homeowners spent just 5.8% of their disposable income on mortgage payments in Q4 2024, compared to 9.0% in Q4 2007. This key stat highlights just how resilient the homeowner segment of the market is—and why today’s housing landscape looks nothing like the one that triggered the Great Recession.
🔐 Why Homeowners Are So Financially Stable Right Now
There are several reasons for this stability, and most of them have to do with structural shifts in the lending market over the past two decades:
- 🏦 96% of mortgage debt is fixed-rate – primarily 30-year fixed-rate loans. The U.S. is unique here; most other countries (including Canada and the U.K.) rely on variable-rate mortgages that expose owners to rate shocks.
- 💰 Roughly 40% of owner-occupied homes are mortgage-free – These homeowners own their properties outright, giving them a significant cushion against market downturns and rising living costs.
- ✅ Tighter lending standards – Since the 2008 housing crisis, mortgage underwriting has become far more conservative. Most borrowers today have higher credit scores, larger down payments, and fully documented income.
🏠 What This Means for Los Angeles Real Estate
If you’re a buyer, seller, or investor in the Westside Los Angeles real estate market, this matters. Homeowners aren’t feeling forced to sell, even in a high-rate environment. That’s why inventory has remained low and home prices have stayed firm, particularly in desirable neighborhoods like Brentwood, Pacific Palisades, Santa Monica, and Beverly Hills.
For sellers, this market stability supports pricing power. If you’re sitting on equity, you have options—whether that means upgrading, relocating, or leveraging your current home to buy investment property all-cash.
For buyers, this means don’t wait for a crash—it’s not coming. Instead, focus on negotiating price and financing where you can. While affordability is a challenge due to elevated rates, prices are unlikely to dip dramatically, especially in high-demand areas of Los Angeles.
⚠️ The Caveat: Not Everyone Is Thriving
While homeowners are on strong footing, the same cannot be said for many renters or lower-income households. ResiClub’s report notes:
- 🔺 Credit card delinquencies are rising, a signal of strain among non-homeowning households
- 🚫 Renters remain heavily cost-burdened, particularly in cities like LA where housing supply has not kept up with demand
Until we build more housing at all price points, affordability challenges will persist—especially for first-time buyers who are trying to save for large down payments.
📈 Bottom Line
We’re not in a bubble. We’re in a new kind of housing cycle—one where fixed-rate mortgages, strong equity positions, and conservative lending practices have created a far more durable foundation for homeowners. While buyers still face affordability hurdles, especially in a market like Los Angeles, the key is education, strategy, and timing.
Want help navigating this market with confidence?
📞 Contact Abdo Pierre Faissal for unparalleled real estate service.
📧 [email protected] | 📲 310-620-1038
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