LA Market Shift: Buyer Leverage Is Back — How to Use Today's 7% Rates Instead of Waiting Them Out
The market conversation changed last week.
On September 16, the Federal Reserve raised its target rate by 25 basis points to 3.75%–4.00%. It was the first rate hike in three years. The reason was straightforward: inflation remains sticky.
Mortgage rates responded quickly. The 30-year fixed moved back above 7%.
That matters, but it does not mean buyers should panic. It means the strategy needs to change.
The “wait for rates to come down soon” approach is no longer a reliable plan. Buyers who are ready should work with today’s numbers, use the negotiating room in the market, and look for financing tools that make the payment more manageable.
This is where buyer leverage is real.
The Market
Los Angeles remains a buyer’s market, but it is not a declining market.
The median price is approximately $1.05 million, up about 1.4% year over year. Appreciation is forecast at roughly 1%–4%. Homes are taking an average of 52 days to sell, and inventory is up 3.3% year over year.
That combination gives buyers more time and more room to negotiate.
It does not mean every seller will accept a major price reduction. It does mean buyers can look more carefully, compare options, and ask for terms that address today’s higher financing costs.
A home that has been listed for more than 45 days deserves a closer look. The seller may be more open to:
- A seller-paid 2-1 rate buydown
- Closing-cost credits
- Repairs or concessions
- A price adjustment
- Flexible closing timing
A 2-1 buydown temporarily lowers the buyer’s interest rate during the first two years of the loan. The payment is reduced during year one, rises during year two, and then reaches the full note rate in year three.
It is not the right solution for every buyer. But it is worth discussing when a seller wants to keep the price intact and the buyer needs payment relief.
Rates
As of September 21, 2026, use these figures as the working range for this week:
- 30-year fixed: ~7.01%–7.05%
- 15-year fixed: ~6.39%–6.43%
- VA 30-year: averaging 6.88%
- FHA: continues to price below the conventional index, making it the cheaper entry point right now for many first-time buyers
- Jumbo 30-year: approximately 7.0%–7.4%, depending on lender and points
- CalHFA MyHome Assistance Program: unchanged, with up to 3.5% of the purchase price available as a deferred, no-monthly-payment second mortgage for down payment and closing costs
Rates move week to week, and an earlier article on this blog reflects the prior week’s figures.
Rates change daily. The important point is not to anchor on a quote from two weeks ago.
Before writing an offer, active buyers should ask their lender to requalify them using today’s rate. That protects the buyer from building an offer around a payment that may no longer be available.
Requalification is not meant to discourage anyone. It gives buyers a clear number before they make a commitment. It helps prevent surprises during underwriting. It also protects the transaction from falling apart near the finish line.
The Loan-Limit Opportunity
One of the most useful changes in this week’s briefing is easy to overlook.
The 2026 loan-limit update may help some buyers move out of jumbo financing and into a high-balance conforming or FHA loan.
For Los Angeles and Orange County, the figures are:
- Conforming limit: $832,750, up from $806,500
- High-balance and FHA ceiling: $1,249,125, up from $1,209,750
- Increase: 3.26%
- Effective: January 1
Here is the plain-language version.
A buyer who was just above the old loan limit may now fit into a different financing category. Instead of using a jumbo loan, the buyer may qualify for high-balance conforming financing or, depending on the full financial picture and property, an FHA option.
That shift can matter because the new loan may offer:
- A lower interest rate
- Different reserve requirements
- More flexible underwriting
- A lower monthly payment
- Potentially lower mortgage insurance costs than a jumbo structure
This does not automatically make a buyer eligible. Income, debt, credit, down payment, property type, and lender guidelines still matter.
But it is worth asking the lender to run both scenarios. A buyer shopping near the top of the old limit should not assume jumbo financing is the only path.
The Federal Housing Finance Agency’s loan-limit information and the Federal Reserve’s September 16 announcement are useful starting points. A qualified lender can then apply the figures to the buyer’s specific situation.
Stop / Reconsider
Stop telling buyers that rates should come down soon.
The Fed just reversed course with its first hike in three years. The next meeting is now a hike-risk event, not a cut-hope event. Near-term rate relief should not be the foundation of a purchase plan.
Reconsider any pre-approval or affordability conversation that still assumes sub-6.5% financing.
If a buyer was pre-approved several weeks ago, update the numbers now. If the buyer has been waiting for a lower rate, compare the cost of waiting with the concessions available on homes that have been sitting longer.
The goal is not to push anyone into a purchase. The goal is to make sure the buyer is making a decision with current information.
A clear decision can be:
- Buy now with a seller credit
- Buy now with a temporary buydown
- Adjust the price range
- Increase the down payment
- Consider FHA, VA, or high-balance financing
- Continue waiting with a realistic payment plan
Every one of those choices is more useful than relying on a rate forecast that may not happen.
Capital Is Still Moving
Skeptical sellers may be wondering whether higher rates have stopped real estate investment altogether. The evidence does not support that conclusion.
Decron Properties purchased the Miracle Mile apartment complex at 5550 Wilshire for $114 million, closing September 18. Institutional capital is still committing to Los Angeles multifamily properties even with debt costs around 7%.
That is a helpful signal for move-up sellers. The market has slowed, but it has not stopped.
Also this week, DivcoWest sold the Glendale office building at 655 N. Central Avenue for approximately $70 million. Daniel Negari acquired the historic Bank of Italy building in downtown Los Angeles for approximately $34 million.
Office-to-other-use conversions remain a live theme downtown. These transactions do not predict the outcome of a residential sale, but they do show that capital is still evaluating and moving through Los Angeles.
The Buyer Plan
For buyers considering a purchase now, I would focus on five steps:
Get requalified at today’s 7%+ rates.
Know the payment before writing an offer.Review homes listed for more than 45 days.
Longer marketing time may create room for seller-paid concessions.Ask about a 2-1 buydown or closing-cost credit.
Compare the payment benefit with a price reduction.Run the 2026 loan-limit scenarios.
Ask whether high-balance conforming or FHA financing could replace jumbo financing.Choose a payment you can carry comfortably.
Do not count on a future rate cut to make the purchase work.
I approach these conversations with patience and plain language. The market is changing, but the process can remain manageable. Buyers deserve to understand their options without pressure. Sellers deserve a strategy that reflects current financing conditions without assuming prices are falling.
If you want to review your current buying power, compare financing paths, or discuss a property that has been sitting on the market, connect with Diana Marquez directly. We can look at the numbers together and decide what makes sense for your goals.
Diana L. Marquez | CA DRE #01418705 | eXp Realty of Southern California, Inc. — DRE #02187306