Southern California home prices dipped in October for the third straight month, but values remain near all-time highs and unaffordable for most households.
The average home price in the six-county region was $864,586 last month, down 0.4% from September and 1% below the record reached in July, according to data from Zillow.
Though prices have now fallen for three consecutive months, that doesn’t mean they will keep doing so. It’s not uncommon for home prices to fluctuate month to month, or dip starting in the late summer and fall due to seasonal patterns. Home prices are still nearly 4.5% higher than a year earlier in October 2023.
That said, the rate of home price growth is slowing, something many economists expected to happen given the mismatch between incomes and prices.
Home price growth peaked at nearly 9.5% in April and has declined every month since.
Helping to moderate price growth is a housing shortage that, while not going away, is getting slightly less severe.
In recent months, the number of homes listed for sale has steadily grown. Real estate agents say homeowners who once balked at giving up their ultralow mortgage rates from the pandemic and prior are increasingly choosing to move, deciding a larger home is more important than low borrowing costs.
In October, the number of homes on the market had risen in all six counties over the prior year, ranging from a 25% gain in San Bernardino County to 49% in San Diego County. In Los Angeles County, inventory climbed 33%.
Housing prices by cities and neighborhoods in L.A. County
Average home price
Mortgage interest rates are another factor hammering affordability. Borrowing costs fell through the summer, but have been on the rise since October. As of Nov. 14, the rate on the popular 30-year fixed mortgage averaged 6.78% as of Nov. 7, up from 6.08% at the end of September, according to Freddie Mac. Experts have attributed the rise to an economy that has been stronger than expected, as well as the policies former President Trump may institute upon taking office.
Trump has proposed sweeping tariffs and large tax cuts, something experts say would likely boost inflation and the nation’s deficit — two things that typically put upward pressure on mortgage rates.
Note to readers
Welcome to the Los Angeles Times’ Real Estate Tracker. Every month we will publish a report with data on housing prices, mortgage rates and rental prices. Our reporters will explain what the new data mean for Los Angeles and surrounding areas and help you understand what you can expect to pay for an apartment or house. You can read last month’s real estate breakdown here.
Some experts have said they don’t expect home prices to decline in the near future unless there’s a recession. That’s because while inventory is improving, it’s still low historically. Prices, however, should climb more slowly, or remain relatively flat, giving incomes a chance to catch up.
However, Richard Green, director of the USC Lusk Center for Real Estate, cautioned it’s difficult to say what comes next, because it’s unclear which of Trump’s proposed policies will become a reality.
Explore home prices and rents for October
Use the tables below to search for home sale prices and apartment rental prices by city, neighborhood and county.
Rental prices in Southern California
In the last year, asking rents for apartments in many parts of Southern California have ticked down.
Experts say the trend is driven by a rising number of vacancies, which have forced some landlords to accept less in rent. Vacancies have risen because apartment supply is expanding and demand has fallen as consumers worry about the economy and inflation.
Additionally, the large millennial generation is increasingly aging into homeownership, as the smaller Generation Z enters the apartment market.
Prospective renters shouldn’t get too excited, however. Rent is still extremely high.
In October, the median rent for vacant units of all sizes across Los Angeles County was $2,069, down 1.7% from a year earlier but 7.5% more than in October 2019, according to data from Apartment List.
