(Just The News)—The monthly payment to purchase an entry-level California home has risen 88% since 2020, according to a new report from the non-partisan, state-funded Legislative Analyst’s Office. With the ongoing wildfires having destroyed over 10,000 buildings in high-income areas, prices are primed to go up even further as wealthy families seek new shelter.
“Payments for a mid-tier home were nearly $5,800 a month in December 2024 – an 84% increase since January 2020. Payments for a bottom-tier home were over $3,500 per month – an 88% increase since January 2020,” wrote the LAO. “This rapid increase in monthly costs for homebuyers was driven by higher home prices and increasing mortgage rates.”
The LAO also notes that home prices dropped briefly early in the pandemic during 2020; rising prices spurred by low interest rates drive home payments to rise even as rates remained steady, with rate increases starting in 2022 making financing those higher purchase prices even more expensive.
The LAO says that this rapid increase in mortgage rates from 3% before 2022 to 7% now means that many homeowners can’t afford to move, even if they wanted to, thus putting further pressure on housing prices as fewer homeowners decide to sell.
“For example, if a homeowner with a mortgage rate of 5 percent sold their home and bought a new similarly-priced home at current interest rates, they would have monthly payments approximately 18 percent higher. For the typical homeowners, this amounts to over $300,000 more in payments over the life of a 30-year loan. As a result, many are choosing to stay put, significantly limiting the number of homes available for sale in the state’s tight housing market,” the LAO wrote.
“81 percent of California homeowners currently have mortgage rates below 5 percent, while new buyers face the much higher 7 percent rate,” the LAO wrote. “If a homeowner with a mortgage rate of 5 percent sold their home and bought a new similarly-priced home at current interest rates, they would have monthly payments approximately 18 percent higher. For the typical homeowners, this amounts to over $300,000 more in payments over the life of a 30-year loan.”
“As a result, many are choosing to stay put, significantly limiting the number of homes available for sale in the state’s tight housing market,” continued the LAO.
With over 12,000 buildings now destroyed by the ongoing fires – concentrated in wealthier areas such as the Pacific Palisades where the median home for sale before the fire cost $4.6 million – prices are already spiking as high-income families try to get temporary housing while their homes are rebuilt, or move somewhere new entirely.
The City of Los Angeles permitted just 8,706 new homes in 2024, down from 11,311 in 2023, and 15,295 in 2022, meaning the wildfires could decrease the city’s overall housing supply as building slows.
Hilgard Analytics’s 2024 report on residential permitting in Los Angeles blamed high interest rates and the city’s new transfer tax on all property over $5 million for the recent decline.
“Persistently high interest rates, coupled with negative externalities from Measure ULA, discouraged developers from taking on the financial risks of new projects,” wrote urban planner Joshua Baum in the report.
At Last, a Company With Integrity in the Gold IRA Industry
For several years, I’ve been vetting out precious metals companies in search of the best. I believe in gold and silver but it’s hard to find integrity in the Gold IRA industry. The vast majority operate with shady tactics and gigantic spreads that take advantage of Americans who simply want to protect their life’s savings.
I’ve found a handful that I like and I’ve worked with some of them. By no means would I “unrecommend” them because, again, I vetted them out and found them to be above the fold. Unfortunately, it isn’t hard to be better than the rest when the rest are so darn awful.
After years of searching, I finally found a company that truly operates with integrity. Augusta Precious Metals has three important attributes that set them far above the competition:
- Non-Commissioned Sales Team: I cannot stress how important and unique this is. With just about every other company in the Gold IRA industry, the sales teams make commission from every account they open. This means they steer their clients toward the gold and silver products with the highest commission. With Augusta Precious Metals, the team is solely focused on putting the best gold and silver for their clients into their IRA. They get paid to serve the best interests of the Gold IRA client, NOT their own commission pay.
- Incredibly Low Fees: Most Americans would be shocked if they knew the spread other Gold IRA companies charge. Augusta charges just 5% versus up to 45% elsewhere.
- No Pressure, No Gimmicks: There’s an understanding among most in the Gold IRA industry that fear and pressure is the way to go. Augusta Precious Metals takes a sober approach when working with clients because they hold integrity in the highest possible regard. This is why they don’t offer gimmicks like “free” or “bonus” silver. It’s also why they do not apply pressure tactics to get quick sales. Their educational and transparent approach to doing business is exceedingly rare in the Gold IRA industry.