Economy & Mortgage News.Alas! At last we are seeing some respite in home mortgage rates, more on that below! The economy continues to be resilient, with consumer spending showing no signs of a slowdown especially coming into the holiday season. So while many economists believe the Fed is done with interest rate hikes, it may take a while to start cutting them down. Mortgage interest rates have been going down now for a few weeks, and reached the lowest in nine weeks during Thanksgiving break. According to C.A.R. research, rates fell by 50 basis points from the October peak. A 30-year fixed rate conforming loan is roughly at 6.625% and an APR of 6.825%, while a 30-year fixed rate jumbo loan is roughly at 6.625% and an APR of 6.756%. Many economists have forecasted rates coming down towards the end of 2024, let’s hope that is the case so that inventory can make its way back, and sellers can have more options to sell and move. Many people are talking about the “mansion tax” that went into effect in April 2023. As such, we would like to give our community a quick update. This is a measure that was voted by the LA residents, and it currently only affects home sales within the city of Los Angeles. Measure ULA brings a charge of 4% on all residential and commercial sales that close between $5MM - $9.99MM. Anything at or above $10MM, there will be a tax levied at 5.5% of the sales price - this is all in addition to any other property or cap gains taxes the sellers maybe responsible for. As mentioned, Measure ULA does not affect our Souhtbay, and it is intended to bring revenue to go towards the much problematic homelessness in the city of L.A. There are some exclusions to the ULA, including properties that hold title as TIC (Tenants in Common), among other exclusions that your CPA would be able to discuss. See you all our next issue of the BHAUS EIGHT Newsletter!
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