What Interest Rate Changes Mean for LA & South Bay Homebuyers, Sellers, and Investors (And How to Make the Most of It)

Think of this as your inside scoop on how today’s rates affect your next move—and why sitting on the sidelines might cost you more than you think.

Mortgage Rates Are Moving – Here’s What You Need to Know

As of March 11, 2025, here’s where mortgage rates stand:

• 30-year fixed: 6.63%
• 15-year fixed: 5.63% – 6.24% (varies by lender)
• 5/1 Adjustable-Rate Mortgage (ARM): 5.25% – 6.04%

Rates have dipped slightly, which is good news for buyers and sellers alike. But experts remain split on where things are headed next. While some predict rates will decline further, others say they’ll hover around current levels for the foreseeable future.

The takeaway? If you're waiting for rates to "crash" back down, you might be waiting forever. Instead of chasing the perfect moment, focus on what you can afford now and how to negotiate the best possible deal.

For Buyers: How to Maximize Your Purchasing Power

With a slight drop in interest rates, your mortgage payment just got a little more manageable. That means now could be a smart time to lock in a home before demand surges again.

For example: Say you’re eyeing a $900,000 home with 20% down. At 7% interest, your monthly principal and interest payment is around $4,800. But at 6.5%, that drops by nearly $250 a month.

Even small shifts in rates can mean big savings, and right now, 41.3% of homes in Los Angeles are still selling above asking price—especially in hot areas like West LA, Culver City, and Redondo Beach.

Buyer Tips:

• Be ready to compete. Homes in high-demand areas are still getting multiple offers, so get pre-approved and work with an agent who knows how to negotiate.
• Expand your search. Some areas like Rancho Palos Verdes saw a more moderate 13% price increase compared to Manhattan Beach’s 26% jump. Looking just outside the hot zones could save you money.
• Negotiate smartly. Some sellers are willing to buy down your rate or cover closing costs. Don’t be afraid to ask!

For Sellers: The Market is Still in Your Favor—If You Price Right

If you’re selling, you’re in a strong position in certain parts of LA—but pricing strategically is more important than ever.

What’s happening locally?

• Manhattan Beach prices are up 26.4%, Hermosa Beach up 34.4%—sellers in these areas have serious leverage.
• Palos Verdes Estates saw a 20.7% decrease—if you're selling here, pricing competitively is key.
• Buyers are getting pickier. Higher rates mean they’re looking for homes that feel like a good deal.

Seller Tips:

• Price competitively. Overpricing will leave your home sitting on the market, especially in areas where prices have softened.
• Offer incentives. A rate buy-down or help with closing costs can make your home more attractive to buyers struggling with affordability.
• Make your home shine. Staged homes still sell faster, even in a higher-rate environment.

For Investors: The Market is Still Full of Opportunity

Interest rates affect real estate investors differently. If you’re flipping, higher rates may tighten your margins. If you’re buying rentals, cash flow is king.

Key Investor Insights:

• Multifamily properties in LA are in high demand, making them a solid long-term bet.
• Emerging neighborhoods like Inglewood and South Bay cities are drawing attention due to new developments and infrastructure improvements.
• Burnt land sales in LA are creating opportunities for investors willing to redevelop discounted properties.

Investor Tips:

• Look beyond single-family homes. Multifamily and commercial properties are offering solid returns right now.
• Focus on cash flow. With higher rates, rental income is more important than speculation.
• Jump on discounted properties. Some sellers are pricing aggressively to move inventory—take advantage.

Don’t Wait for the “Perfect” Market—It Doesn’t Exist

One of the biggest mistakes people make in real estate? Waiting for the perfect moment.

Here’s the reality: Real estate values in Los Angeles and the South Bay have only gone up over time. Even when there are dips, the overall trend is appreciation.

Back in 2012, you could’ve bought a home in El Segundo for around $600,000. Today? That same home is worth over $1.4 million.

The people who bought then didn’t wait for the “perfect” rate or the “perfect” deal. They made moves they could afford—and they’re the ones sitting on major equity today.

So if you’re thinking about buying, selling, or investing, the best thing you can do is work with what you have now. Real estate is always moving—make sure you’re moving with it.