The Iran war shocked L.A.s housing market. Recovery wont be simple

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Katie Davis has whiplash.A longtime renter, she’s in the market for her first home, but she needs mortgage rates to drop in order to afford the monthly payments.Anything under 6% would be feasible.For the last year, she’s been tracking them like a hawk.

She watched them fall from 7% last spring to 6.5% last fall until they finally dipped below 6% in February.“I thought my time had finally come,” Davis said.Days later, a series of airstrikes kicked off the Iran war, spiking mortgage rates.Then, this month, the U.S.

struck a ceasefire deal, bringing rates back down again.During that stretch, Davis has waffled between hopeless and hopeful on a weekly basis.“I just want a little starter house in El Sereno, but somehow it feels contingent on whether the Strait of Hormuz is open or not,” she said.A small swing in mortgage rates might not feel like much, but for many first-time homebuyers, the margins of affordability are razor-thin in Southern California’s expensive market, and $200 more for a monthly payment is the difference between keeping up with a loan or being crushed by it.L.A.’s housing market was already cold; according to Zillow, only 3,072 homes traded hands in L.A.

County in January, the lowest monthly total in three years.The Iran war all but froze it, sending mortgage rates back up to 6.46% and pulling would-be buyers out of the market.In February, the median L.A.

home for sale spent 80 days on the market — the longest median in the last five years, according to Redfin.In addition, 17.6% of home listings had price cuts, up 1.4 percentage points year over year.There’s a growing chasm between the number of sellers and buyers in the market in L.A., mirroring a national trend.

According to a March Redfin report, there are 630,000 more sellers than buyers in the active U.S.market — the largest gap on record dating back to 2013.Bret Parsons, a real es...