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Los Angeles has long been one of the most vibrant and dynamic real estate markets in the U.S., and a magnet for home buyers, investors, and developers alike. As we merge into the second half of 2025, understanding the Los Angeles housing market is essential for prospective buyers and sellers. This article explores the key trends, factors influencing the market, potential opportunities, and challenges that could shape the Los Angeles housing market forecast for 2025.
As of mid-2025, LA’s housing market is characterized by an affordability crisis, which continues to remain a significant issue. While housing shortages have been rampant in LA over the years, the past few months have seen a jump in active listings. However, home price appreciation has been relatively stagnant over the past few years.
Despite economic fluctuations and interest rate changes, LA continues to attract home buyers thanks to its job opportunities, cultural appeal, and desirable climate.
Mortgage rates play a key role in buyer behavior. As of mid-2025, the average rates for 30-year and 15-year fixed-rate mortgages are as follows (based on a $600,000 loan, 800+ credit score, and single-family primary residence):
Experts anticipate a gradual decline in rates if inflation continues to ease and the Federal Reserve slashes rates in its upcoming meetings.
What this means for buyers:
What this means for sellers:
Los Angeles is made up of multiple micro-markets, each with its own home prices and buyer demographics. Here’s a snapshot of how different areas in LA are currently performing (prices listed as per Realtor.com, July 2025):
| Neighborhood | Median Sale Price | Market Traits |
| Downtown LA | $717,500 | Urban hub, high-density residential growth, creative office conversions |
| Beverly Hills | $3.6 million | Luxury market, strong international demand |
| Hollywood Hills | $2.4 million | Popular for creatives and investors |
| Westwood | $1.2 million | High rental demand, near UCLA |
| Highland Park | $1,076,078 | Gentrifying, popular with first-time buyers |
| North Hills | $805,000 | Affordable, strong rental yields |
Like many other markets across the country, Los Angeles has long struggled with a shortage of housing and underproduction. There is currently a 3.9-month supply of homes available for sale, which falls short of a balanced market characterized by a 5 to 6-month supply.
That said, inventory has grown over recent months. According to Realtor.com, active listings in June 2025 jumped 28.9% compared to the same month last year, signaling a hopeful trend for home buyers. Daily listings in June 2025 averaged 1.086 million, outpacing June 2024’s 839,992.
However, despite this momentum, listing numbers still fall short of typical levels seen prior to the pandemic.
Despite the rise in housing inventory in LA recently, new construction sharply declined in the first quarter of 2025, which may contribute to a worsening ongoing affordability crisis.
During Q1 2025, the city approved permits for just 1,325 new homes, marking nearly a 57% decrease year-over-year. Construction timelines remain slow due to labor shortages, zoning laws, high land costs, and permitting delays.
This imbalance in housing supply versus demand continues to support price stability in the city.
Los Angeles remains one of the most expensive rental markets in the country, with the average rent in this city being 40% higher than the national average.
Houses for rent in LA are much more expensive, with an average monthly rent of $5,300.
Investors looking to earn rental income are still finding opportunities in:
Home prices in Los Angeles continue to significantly outpace neighboring cities like Riverside, and Fresno, though several other cities continue to command much higher price points. Here’s how LA compares to other cities in Southern California:
| City | Average Home Price |
| Los Angeles | $1.1 million |
| Santa Clarita | $815,000 |
| Fresno | $405,000 |
| Riverside | $662,000 |
| Chula Vista | $847,500 |
| Santa Monica | $1.8 million |
| San Diego | $960,000 |
| Carlsbad | $1.5 million |
| Pasadena | $1.4 million |
As Los Angeles continues to be a competitive real estate market in 2025, buyers and sellers should adapt their strategies to navigate evolving neighborhood trends and opportunities across the city.
LA’s real estate market in the latter half of 2025 is showing signs of a gentle slowdown. Inventory is on the rise, offering more choices for buyers, but ongoing elevated mortgage rates continue to curb demand. Looking ahead, experts anticipate a slight dip in home values by next year.
Despite this, LA remains an attractive market for buyers as a long-term investment thanks to its vibrant economy, expanding job market, and steady demand for housing.
As of July 2025, the median sale price in LA is $1.1 million, with condos and townhomes ranging from $700K to $900K.
Some forecasts suggest home prices in LA will remain relatively stagnant over the coming months, and perhaps even dip by year-end.
Yes, higher rates are cooling demand, but expected Fed rate cuts may ease affordability.
Yes, housing inventory is still well below the 6-month threshold for a buyer’s market, though the market may be shifting.
Homes are selling in about 48 days, slightly longer than in 2024.
Yes, multifamily properties in particular offer strong potential.
High prices, elevated mortgage rates, and stricter lending standards make affordability in LA a major hurdle for buyers.
Population growth, limited housing supply, and strong job sectors — like entertainment and tech — continue to fuel demand.
Possibly — experts suggest a slight dip by year-end.
If you’re looking to buy a home in Los Angeles in 2025, we can help. At Sammamish Mortgage, we offer various mortgage home loan programs in WA, OR, ID, CO, and CA. Visit our website to get an instant rate quote, or get in touch with us today to have your mortgage questions answered!
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.