“Payment Pulse” deals with the hearth-wrenching reality of Southern California homebuying finances — it’s really about the size of the monthly check to the lender, not how big the sales price is.
Buzz: A typical February buyer in the six-county region paid 15% more than purchases cost a year earlier — and got a house payment 26% larger thanks to rising interest rates.
Source: My trusty spreadsheet’s look at what’s become a blood-boiling mix: the intersection of higher home prices (monthly median from DQNews) and rising mortgage rates (average 30-year deals from Freddie Mac) that generates a hypothetical typical monthly home-loan payment a buyer would get, assuming a 20% downpayment. We didn’t account for property taxes, association dues or insurance.
Rate watch: 3.44% three-month average vs. 3.21% the previous month, and 2.74% a year earlier. What’s that mean to a borrower’s buying power? In one month, it’s a 2.8% decrease. One year? An 8.5% decrease — a drop larger than 91% of all 12-month periods since 1988.
Pay to the order of
In the six-county region, last month’s buyer got a $2,517 house payment on the record $706,000 median. That payment is 2% below the all-time high of August 2007.
The estimated payment is 6.1% higher in a month and up 26% in a year — largest 12-month jump since March 2014. The median by itself is up 15% since February 2021.
And, do not forget that this math assumes a $141,200 downpayment for February — that’s 20% — and that financial burden grew $18,800 in a year.
Locally speaking
Same painful house-payment math within the counties …
Los Angeles: Record-high $2,852 payment on the $800,000 median. Payment change? 4.1% increase in a month and up 24% in a year. Median? up 13% over 12 months. Downpayment? $160,000 — up $18,600 in a year.
Orange: Record-high $3,512 payment on the record $985,000 median. Payment change? 6.7% increase in a month and up 31% in a year. Median? up 20% over 12 months. Downpayment? $197,000 — up $33,000 in a year.
Riverside: $2,015 payment on the record $565,000 median. That payment is 7% below the all-time high. Payment change? 5.7% increase in a month and up 32% in a year. Median? up 20% over 12 months. Downpayment? $113,000 — up $19,100 in a year.
San Bernardino: $1,729 payment on the $485,000 median. That payment is 8% below the all-time high. Payment change? 5.1% increase in a month and up 29% in a year. Median? up 18% over 12 months. Downpayment? $97,000 — up $14,600 in a year.
Bottom line
Ponder these soaring costs in a historical context. Rarely have prices and rates put more pressure on house hunters.
Regionally, the year’s estimated house payment jump tops 96% of all 12-month periods since 1988. By county: Los Angeles (93%), Orange (96%), Riverside (96%), San Bernardino (92%), San Diego (95%), and Ventura (94%).
Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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