Last Wednesday the Federal Reserve did something it hasn’t done in quiet some time. It raised rates.
The Fed lifted its benchmark by a quarter point on September 16, to a target range of 3.75% to 4.00%, on a 12–0 vote. As Redfin reported, Chair Kevin Warsh put it simply: “We removed a dose of accommodation.” And according to Redfin’s read of the Fed’s projections, 12 of 18 officials expect at least one more hike before year-end. The next meeting is October 27–28.
Mortgage rates didn’t wait.
What the payment looks like now
Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed at 6.95% on September 17, up from 6.76% a week earlier and 6.26% a year ago. The 15-year sits at 6.26%. That survey mostly captures the days before the Fed announcement.
The daily numbers tell you where lenders went next. Mortgage News Daily’s index had the 30-year fixed at 7.20% on September 18, with the 15-year at 6.83%.
Here’s what that looks like in the Orange County Housing Market. The California Association of Realtors puts Orange County’s August median at $1,452,500. With 20% down, you’re financing $1,162,000.
- At 7.20%: about $7,888 a month in principal and interest
- At 6.95%: about $7,692
- At a year-ago 6.26%: about $7,162
That’s $726 a month more than a year ago, on the same house at the same price. Your lender’s quote will depend on your loan and your credit, but that’s the order of magnitude.
Not everyone feels it the same way
The most recent Orange County Housing Report, dated September 14, counted 5,032 active listings, the first increase after five straight weeks of decline.
The broker behind that report on the Orange County Housing Market, made the point I keep coming back to: “Just over a third of our inventory sits under $1 million, 1,899 of our 5,032 active listings.” That, he wrote, “is the segment where the rate math bites hardest, because the monthly payment is the whole equation.” The other two-thirds sit “in a buyer pool that is far less payment driven and far more equity driven.”
I agree with him. A first-time buyer stretching for a $900,000 condo just lost real purchasing power.
Prices: OC still beats the state, but August cooled
The C.A.R. August report shows Orange County’s median at $1,452,500, up 4.9% from a year ago but down 1.5% from July’s $1,475,000. OC sales fell 8.2% from July and 3.4% from last August.
Statewide, C.A.R.’s median was $901,420, up just 0.1% year over year, and statewide sales rose 1.4% from a year ago.
Put those side by side. California is selling slightly more homes at flat prices. Orange County Housing Market is selling fewer homes at higher prices. We’re still a scarcity market, and scarcity keeps prices firm even when fewer deals close.
The split inside the county matters too. That September 14 housing report put the median closed single-family price at $1,550,000 and condos and townhomes at $803,750. Many of those condos sit right in the payment-sensitive band.
C.A.R. President Tamara Suminski saw this coming before the Fed moved: “Buyers remained engaged in August despite elevated borrowing costs, but the recent rise in mortgage rates and continued economic uncertainty could create some headwinds as we move into the fall.”
Laguna Beach is moving faster, not slower
Here’s the data point that might surprise. Redfin’s figures for the three months ending August show Laguna Beach homes selling at a median of about $3.3 million, up 15.0% year over year. Median time on market was 67 days, versus 98 days a year earlier, and the sale-to-list ratio was 96.4%.
It’s a small sample, and I wouldn’t treat 15% as the new normal. But the direction confirms the argument above. At the coast, buyers are using equity and cash, and rates are a secondary concern.
What I’d do this week
If you’re selling. Know which market you’re in. Under $1-2 million, your buyer’s budget just shrank by several hundred dollars a month, and another Fed meeting is five weeks out. Price to today’s payment, not to spring’s. Above $2 million and on the coast, you’re still holding a strong hand, but 96.4% sale-to-list in Laguna tells you buyers still negotiate. Price it right on day one and let the scarcity work for you.
If you’re buying. If your pre-approval was written a month ago, it’s stale. Get it refreshed at today’s rates so you know your real ceiling, and ask your lender what a lock and a float-down option cost right now. Then look at what the rate move handed you: slightly more inventory and fewer payment-driven competitors, especially in the $1M–$2M band. That’s leverage, and it doesn’t last forever.
The data tells you what the market is doing. It can’t tell you if this is your moment. That part is a conversation.
Thinking about selling? Start with a free, no-obligation home valuation. I’ll show you where your home sits in its price band at today’s rates. Or grab my Orange County Seller’s Guide.
Thinking about buying? My Orange County Home Buyer’s Guide walks you through the process, from pre-approval to keys.
Jaleesa Peluso | Berkshire Hathaway HomeServices California Properties
Phone: (949) 395-0960 | Email: Jaleesa@jaleesapeluso.com
DRE #01935097