Mortgage rates top 7% for the first time since 2002, chilling L.A. housing market
The Los Angeles Housing Panel on Friday reported that mortgage rates are climbing back up to more than 7 percent for the first time since 2002, according to real estate agents.
The panel, whose recommendations have become a template for housing policy, reported that the average mortgage rate for a 30-year fixed rate mortgage in the city is now 6.74 percent, with a 0.24 percent discount for FHA borrowers.
The rate for a 30-year fixed loan in the Los Angeles area is now the highest it has been since January 2002, when rates topped 7 percent.
“We’re in uncharted territory, and we are going to see how fast it goes up,” Los Angeles Councilman Paul Koretz, a member of the panel, told the Daily News before the report’s release.
“I still see the benefits of the housing crisis and the potential for greater stability for the city,” he said.
“I do not see that the situation will have improved as we move into 2012,” he said.
The city’s housing market has been under the microscope since the recession started to turn in 2008. Analysts have said that while housing prices are climbing back to their 2007 levels, the market remains largely depressed and not truly growing.
But the LAHCA, which is comprised of representatives from the city, city councils and various housing and development organizations, has come out against any policy that would keep rents higher, such as rental controls or zoning ordinances that keep apartments limited in size.
“A rental ceiling is the death of the rental apartment industry,” said City Councilman Dennis Zine, a member of the LAHCA.
“It puts a ceiling and cap on rent increases for a certain period of time,” he said.
“I don’t think that the situation will have improved as we move into 2012, but I do think that the reality of it has changed because