Buyers Beware—or Be Ready? South LA County Market Shifts You Need to Know Now

Shifting Rates, Surging Sales & a Cloudy Outlook: What It Means for Buyers and Sellers Today

The South LA County housing market continues to ride the wave of economic uncertainty, with both opportunities and caution signs in the mix. Last week’s developments brought some temporary relief on mortgage rates, a surprise surge in new home sales, and mixed signals from the broader economy. Here's what local buyers, sellers, and investors need to know right now.

📉 Mortgage Rates Took a Breather – But For How Long?

After three weeks of steady increases, mortgage rates finally saw a brief retreat last Friday. This reversal followed a spike in longer-term U.S. Treasury yields, driven by:

• Moody’s recent downgrade of the U.S. credit rating

• The House’s passage of a tax bill expected to raise the federal deficit

• Receding recession fears as certain tariffs were rolled back

• Persistent inflation concerns linked to global trade tensions

Yields on 30-year Treasury bonds climbed past 5.1%, a level unseen since 2023. Mortgage rates followed suit before easing slightly after President Trump announced—then delayed—a 50% tariff on EU goods. With that tariff now postponed until July 9, we may see rates resume their upward trend this week.

Local Impact: If you're in South LA County and thinking about making a move, this brief dip in rates may be your window to lock in better financing before rates possibly rise again.

🏡 New Home Sales Jump to 3-Year High

Nationally, new home sales surged 10.9% in April to a seasonally adjusted rate of 743,000 units—the highest since February 2022. The South led the charge with an 11.7% month-over-month increase.

Builders are sweetening the deal with incentives like mortgage-rate buydowns and price reductions, which are helping push hesitant buyers off the fence. Inventory also remains strong, with over 500,000 new homes on the market for the third month in a row.

Local Insight: South LA County has seen increased builder activity in areas like Carson, Inglewood, and parts of Long Beach. If you’re open to new construction, now might be the time to take advantage of builder incentives before demand catches up with supply.

👷 Labor Market Shows Resilience, But Cracks Are Forming

Initial jobless claims dipped slightly last week to 227,000—California among the states with the biggest declines. However, continuing claims rose to nearly 1.9 million, a sign that while layoffs remain low, job seekers are taking longer to find new employment.

What It Means Locally: A resilient labor market supports buyer demand, but prolonged job searches could signal softer household finances down the road. This could impact buying power in the second half of the year.

🛠️ Builder Confidence Drops as Tariff Fears Rise

Despite the jump in sales, builder confidence took a hit in May. The NAHB index dropped 6 points to 34, with builders citing high interest rates and ongoing tariff concerns. In the West—which includes California—confidence fell the most.

Price reductions were used by 34% of builders in May (up from 29% in April), and over 60% continued using sales incentives.

Local Takeaway: Expect continued price flexibility from builders, especially in developments that need to move inventory this summer.

🏪 Small Business Optimism Sinks Again

Small business owners are also feeling the pressure. The NFIB Small Business Optimism Index dropped for the fourth month in a row, hitting its lowest level since late 2024. Fewer owners reported being able to fill open positions, and expectations for future business conditions are dimming.

Local Lens: South LA County’s economy leans heavily on small businesses—from mom-and-pop restaurants to local service providers. A decline in their confidence could affect employment, wages, and ultimately, the local housing market’s momentum.

💬 Bottom Line

The South LA County market is being pulled in multiple directions. While builder incentives and a resilient job market are keeping demand alive, ongoing rate volatility, global tariffs, and weakening confidence among both builders and business owners are cause for watchful caution.

📞 Want to know how these trends affect your city or neighborhood? Thinking about buying, selling, or holding off?
Let’s talk. Reach out for hyper-local insights and personalized guidance to help you decide if now’s the right time to make your next move.

Maiyah Jimenez
Broker Associate | MJ & Associates | Real
📍 Serving Long Beach & South LA County
📧 maiyah.jimenez@gmail.com
📱 (323) 200-4568
📅 Schedule a call: Link to my calendar