The Brief

You might expect that mortgage rates would be falling right now after the Federal Reserve cut interest rates by a half-point last month.

Instead, mortgage rates jumped higher. The latest data from Freddie Mac showed that the average 30-year mortgage rate had increased to 6.4%, more than a quarter-point higher than it was two weeks ago.

The news is probably an unwelcome surprise to the folks who had been hoping for lower interest rates to finally come off the sidelines and start shopping for a home.

Here’s what’s going on — and what it means for those trying to buy a home now.

The Fed doesn’t set mortgage rates

Here's the thing: The Fed can influence mortgage rates but it doesn't set them.

Instead, mortgage rates mainly follow a different number: the yield on 10-year Treasury bonds. That yield has gone up recently for a number of reasons, including because investors are expecting the Fed to be a little more cautious in cutting rates after the jumbo-sized cut last month.

But it's not just the 10-year Treasury yield influencing mortgage rates.

The mortgage lender needs to cover its costs and make a profit, so it adds its own percentage on top, for example. And the specific mortgage rate that you get will depend on your own factors, like your credit score and the size and type of loan you’re getting.

That said, despite the recent uptick, mortgage rates are still more than a full point lower than they were this time last year, falling as investors anticipated the Fed's rate cuts and factored those into the 10-year Treasury yield.

The lower mortgage rates compared to a year ago have been good for some homeowners. Lots of people have taken advantage to refinance their mortgages if they bought their homes in the last couple of years, when rates were higher.

The lower rates available now mean those homeowners can potentially save hundreds of dollars a month if they refinance.

Mortgage rates have ticked up slightly in October

Weekly average for a 30-year fixed-rate mortgage

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Juweek Adolphe and Alyson Hurt/NPR

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Freddie Mac

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Where mortgage rates go from here

So where are mortgage rates headed? That's difficult to answer, since mortgage rates are affected by so many factors.

But there's one thing that experts generally agree on: They likely won't go anywhere near the levels of a few years go.

In 2019, for example, rates for a 30-year fixed-rate mortgage ranged from about 3.75% to 4.5%. And they dropped to as low as 2.65% in early 2021 as the pandemic wore on.

Many forecasts have rates near 6% at the end of this year — and falling to about 5.8% next year.

“I think the new normal is maybe 6% mortgage rate,” says Lawrence Yun, the chief economist at the National Association of Realtors. “If we are lucky, maybe we get to 5.5% mortgage rate. Or if we are unlucky, maybe the mortgage rate trends back up towards 7%.”

But Yun is confident one of thing: The days of 3% and 4% mortgage rates are over — at least in his lifetime, he says.

So what to do now?

For homebuyers, the ever-shifting rate environment can foster uncertainty: Is it better to wait for mortgage rates to fall, or start looking now?

Experts advise against trying to time the market — including when it comes to buying a home. That's for two reasons.

First, if you buy a home and then mortgage rates do fall, you can refinance your mortgage and take advantage of the lower rate. But if you wait and rates go up, it just gets harder to afford a home.

Second, home prices do tend to rise over time.

Yun says that even people who bought homes at much higher mortgage rates — like 15% in the early 1980s — have typically had those purchases turn out well, because of rising home values and the ability to refinance as rates fell.

How's the housing market looking? There's some good news

Here's a positive development for buyers: There's more inventory now. The number of homes for sale in September was 6.4% higher than a month earlier and 33.6% above a year ago, according to a report from the brokerage RE/MAX, which looked at single-family homes in 52 markets.

Meanwhile, the days a house stays on the market have been increasing — suggesting the market is getting a bit less competitive.

"I think there is more opportunity for buyers to get in there,” says Sara Briseño Gerrish, a real estate agent at RE/MAX Unlimited in San Antonio.

And there's another indicator showing fewer buyers to compete against: The number of people applying for mortgages has fallen for three straight weeks (though it's still 7% above this time last year).

But home prices remain high

Mortgage rates aren’t the only factor affecting the housing market: Home prices matter too. And, unfortunately for buyers, those remain high.

The median home price has risen about 50% since early 2020, with a major spike during the pandemic. The price increases have slowed, but prices haven't really dropped. The median existing-home sales price in August was $416,700, about 3% higher than a year earlier — showing the stickiness of high prices.

The median home price has risen almost 50% over the last 5 years

Median sales price for all homes, by month

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Juweek Adolphe and Alyson Hurt/NPR

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National Association of Realtors

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The season also has an impact. Homebuying picks up in the spring and peaks in June as warm weather and the end of the school year encourage people to shop. The market typically slows in late summer and throughout the fall, reaching its slowest period during the winter.

That can make fall a good time to shop, that is, if you can find a home that fits your needs: Less competition can mean lower prices and more ability to negotiate.

Fannie Mae is predicting that home sales could be 10% higher next year, coming off the very low levels we’ve been seeing. But it could be spring before the market really picks up.

Topline:

The case: In September, the city settled a lawsuit brought forward by two brothers in their 70s who said they suffered serious injuries after an LAPD officer crashed into their car. Days before the $18 million settlement was reached, lawyers for the brothers said Feldstein Soto called an expert witness testifying for the plaintiffs and “attempted to ingratiate herself with him and asked him to make a contribution to her political campaign,” according to a sworn declaration to the court by the plaintiffs’ attorney, Robert Glassman.

The response: Feldstein Soto did not respond to an interview request. Her spokesperson said the settlement “had nothing to do” with the expert witness. Her campaign manager told LAist the city attorney had been making a routine fundraising call and did not know the person had a role in the case, nor that there were pending requests for her office to pay him fees.

What Jurado says: In a statement to LAist, Jurado said she wants to “make sure that the city’s legal leadership is guided by integrity and accountability, especially when their choices affect public trust, civic rights and the city’s limited resources."

What’s next: The motion needs to go through a few committees before reaching the full City Council. If it passes, the motion calls for the city attorney to “report to council in closed session within 45 days regarding the ethics breach violation and give updates to the City Council."

Every year in Santa Ana, Luis Cantabrana turns the front of his home into an elaborate altar in honor of La Virgen de Guadalupe that draws hundreds of visitors.

Along the front of the house, the multi-colored altar is filled with lights, flowers and a stained-glass tapestry behind a sculpture of the Lady of Guadalupe. Cantabrana’s roof also is lit up with the green, white and red lights that spell out “Virgen de Guadalupe” and a cross.

Visitors are welcomed with music and the smell of roses as they celebrate the saint, but this year’s gathering comes after a dark year for immigrant communities.

Luis Cantabrana stands in front of the stunning altar he built in front of his home in honor of La Virgen de Guadalupe. Every year, his display draws hundreds of visitors.

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Destiny Torres

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LAist

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Why do they celebrate? 

In 1513, the Virgin Mary appeared before St. Juan Diego between Dec. 9 and Dec. 12, asking him to build a church in her honor. Her image — a brown-skinned woman wearing a green veil with her hands together in prayer and an angel at her feet — miraculously appeared on his cloak.

To celebrate in Santa Ana, worshippers gathered late-night Wednesday and in the very early hours Dec. 12 to pray the rosary, sing hymns and celebrate the saint.

Cantabrana has hosted worshippers at his home for 27 years — 17 in Santa Ana.

The altar started out small, he said, and over the years, he added a fabric background, more lights and flowers (lots and lots of flowers).

“It started with me making a promise to la Virgen de Guadalupe that while I had life and a home to build an altar, that I would do it,” Cantabrana said. “Everything you see in photos and videos is pretty, but when you come and see it live, it's more than pretty. It's beautiful.”

The Santa Ana home's elaborate altar in honor of La Virgen de Guadalupe draws hundreds of visitors each year.

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Destiny Torres

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LAist

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Gathering in a time of turmoil 

Many also look to the Lady of Guadalupe for protection, especially at a time when federal enforcement has rattled immigrant communities.

“People don’t want to go to work, they don’t want to take their kids to school, but the love we have for our Virgen de Guadalupe,” Cantabrana said. “We see that la Virgen de Guadalupe has a lot of power, and so we know immigration [enforcement] won’t come here.”

Margarita Lopez of Garden Grove has been visiting the altar for three years with her husband. She’s been celebrating the Virgencita since she was a young girl. Honoring the saint is as important now as ever, she said.

“We ask, and she performs miracles,” Lopez said.

Claudia Tapia, a lifelong Santa Ana resident, said the Virgin Mary represents strength.

“Right now, with everything going on, a lot of our families [have] turned and prayed to the Virgen for strength during these times,” Tapia said. “She's a very strong symbol of Mexican culture, of unity, of faith and of resilience.”

See it for yourself

The shrine will stay up into the new year on the corner of Broadway and Camile Street.

California’s unemployment agency kept paying cellphone bills for 4 1/2 years without checking whether its workers actually were using the devices.

That’s how it racked up $4.6 million in fees for mobile devices its workers were not using, according to a new state audit detailing wasteful spending at several government agencies.

The Employment Development Department’s excessive cellphone bills date to the COVID-19 pandemic, when it shifted call center employees to remote work and faced pressure to release benefits to millions of suddenly unemployed Californians.

It acquired 7,224 cellphones and wireless hotspots by December 2020. State auditors analyzed 54 months of invoices since then and found half the devices were unused for at least two years, 25% were unused for three years and 99 of them were never used at all.

The investigation, which auditors opened after receiving a tip, identified 6,285 devices that were unused for at least four consecutive months, and said the department spent $4.6 million on monthly service fees for them.

From the beginning, the department had about 2,000 more cellphones than call center employees, according to the audit. The gap widened over time after the pandemic ended and the department’s staffing returned to its normal headcount.

As of April, the audit said the department had 1,787 unemployment call center employees, but was paying monthly service fees for 5,097 mobile devices.

“Although obtaining the mobile devices during COVID-19 may have been a good idea to serve the public, continuing to pay the monthly service fees for so many unused devices, especially post-COVID-19, was wasteful,” the audit said.

Department officials told auditors they were unaware of the spending, but auditors pointed to regular invoices from Verizon that showed which phones were not being used.

“We would have expected EDD management to have reconsidered the need to pay the monthly service fees for so many devices that had no voice, message, or data usage,” the audit said.

The unemployment department began acting on the auditors’ findings in April, when it canceled service plans for 2,825 devices. It has since implemented a policy to terminate service plans for devices that go unused for 90 days.

The California state auditor highlighted the mobile devices in its regular report on “improper activities by state agencies and employees.” The audit also showed that the California Air Resources Board overpaid an employee who was on extended leave as he prepared to retire by $171,000.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.