Why Home Prices Aren't Falling Despite High Rates: What It Means for Your SoCal Purchase or Sale
· Market Insight
Mortgage Professional America reports home prices hold firm despite headwinds. Here's what that means for your timing, your offer strategy, and your budget.
According to Mortgage Professional America, home prices are holding steady even though interest rates remain elevated and sales volume has softened. This is counterintuitive, when borrowing costs go up and fewer people are buying, prices usually fall. But across Southern California, that's not happening in most neighborhoods. Understanding why matters if you're planning to buy or sell in the next few months, because it changes how you should think about your move.
The national weekly average for a 30-year fixed mortgage was 7.4% and a 15-year fixed was 6.73%, according to Freddie Mac (房地美) Primary Mortgage Market Survey for the week of October 8, 2026. These are national weekly averages and NOT individual quotes, your own rate depends on your credit score, loan size, down payment, property type and whether you will occupy the home. For a personalized rate, contact Treasure Mortgage. The important point is that rates in the 7.4% range are well above what buyers saw a few years ago, making every purchase more expensive to finance. Yet sellers are not cutting prices to attract buyers. Why?
One reason is seller psychology. Most homeowners bought years ago at lower rates and with lower purchase prices. Even if they want to move, they are often reluctant to accept what feels like a loss, even if the home's actual value has grown. They hold out hoping rates will fall or the right buyer will appear. Another reason is scarcity: in many desirable Southern California neighborhoods, from Irvine and 帕萨迪纳 to the Inland Empire, the number of homes for sale is still relatively tight compared to how many buyers are actively looking. In our MLS feed, we track 5,932 active listings across our service area as of October 11, 2026, and some cities show stronger inventory pressure than others. But overall, low inventory supports prices even when demand is softer.
For buyers, this situation creates both risk and opportunity. The risk is clear: if you borrow at 7.4%, your monthly payment is substantially higher than it was when rates were lower. Suppose a $900,000 purchase with 20% down, that's $180,000 down and a $720,000 loan. At roughly 7.4%, the principal-and-interest payment alone is around $5,360 per month, before property tax (typically around 1.1–1.25% of the purchase price annually, or roughly $1,000 a month on a $900,000 home), insurance, and homeowners association fees if any. That's a real budget commitment. The opportunity is that because prices are not falling, you are not missing a bottom, and negotiating room does exist if you shop carefully and make offers backed by a strong financial picture. Sellers may not have dropped asking prices dramatically, but homes are staying on market longer, and that can translate to better terms or credits if you make the right move.
For sellers, price stability is actually good news if you are thinking of selling within the next six months. You are not forced into a race to the bottom, and your home's value is not evaporating. However, you will need to accept that fewer buyers are in the market at these rate levels, and homes that are overpriced or in poor condition will sit longer. The data shows that homes across our service area are taking an average of 22 days to sell, that's reasonable and shows the market is still moving, but that varies by city and condition. If you list, make sure your home is competitively priced for its neighborhood and in move-in condition, because buyers who are borrowing at 7.4% are being very selective about what they buy.
A practical note for first-time buyers and those from overseas: if you do not have a U.S. credit history, you still have options. Foreign-national buyers can purchase and borrow with as little as 30% down and no U.S. credit history, Social Security number, or ITIN required, the loan is structured on your passport and income documentation. F-1 students, H-1B visa holders, and even tourists visiting on a valid passport can buy and borrow in California. If you are a foreign national, your rate will depend on your profile; for details, visit our rates page at https://tuhaousa.com/rates/. Down payments can be documented gifts from family, which means you do not have to have saved the money yourself. That opens the door for many international buyers who see stable Southern California pricing as a solid long-term investment.
The takeaway is this: stable prices in a high-rate environment are not a reason to wait if you have the financial capacity to move now. Waiting for rates to drop is always risky because no one knows when or if that will happen, and if rates stay elevated, prices may actually firm up further as fewer homes come on the market. If you are selling and your home is in a desirable area with good condition and realistic pricing, you have leverage. If you are buying, expect to pay a real monthly cost but know that the home's value is holding. Reach out to Shirley Tang Team to discuss your specific situation, review your options, and determine whether now is the right time for your move.
Source: Mortgage Professional America, https://www.mpamag.com/us/mortgage-industry/market-updates/home-prices-resist-the-pressure-of-high-rates-and-weak-sales/593046
Note: any interest rate or monthly payment in this article is an illustration, not a quote or an offer of credit. Your actual rate and APR depend on your situation and the day; see today's pricing on the rates page.
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