Fed Holds Rates Steady at 3.75%-4.00%: What Santa Clarita Borrowers Should Know

What the Fed Did on October 28

The Federal Open Market Committee held the federal funds rate at 3.75% to 4.00%, with two committee members pushing for an increase. In his first rate decision as Chair, Kevin Warsh said the central bank will hold fewer rate-setting meetings in future years and reiterated that he is not a fan of forward guidance, meaning markets should expect less advance notice of future moves.

The takeaway for homeowners and buyers is simple: the Fed's hold did not push mortgage rates lower. Mortgage rates follow long-term bond yields more than the Fed's short-term rate, and with inflation still stubborn, investors are keeping yields elevated. The result is a borrowing environment that has been quietly tightening all fall.

Where Mortgage Rates Stand Now

California 30-year fixed mortgage rates are hovering near 7.3% to 7.4%, the highest level in about three years. Public readings this week put the average around 7.375% on Zillow's October 29 tracker and 7.32% in the week of October 22 per the St. Louis Fed series, after Freddie Mac's mid-October survey reached 7.40%. That is up from roughly 7.03% in late September and around 6.2% to 6.3% a year ago.

On a $750,000 loan, the difference between last year's 6.3% and today's 7.4% is hundreds of dollars a month. That is real money, and it is the single biggest reason buyer activity has cooled while prices have held.

What It Means in Santa Clarita

Public trackers put Santa Clarita's three-month median sale price near $807,000, with the typical home spending about 44 days on market and the average sale price around $775,000 in the most recent monthly reading. Prices are holding even with rates near their three-year high, which tells you supply is still thin and well-priced homes still attract qualified buyers.

Statewide, C.A.R.'s September report put California's median at $899,720, up 1.7% year over year, with Southern California's median at $895,000, up 3.0%. Los Angeles County's median came in near $994,670, up 1.2% from a year earlier. Prices are not falling; activity is simply slower and more deliberate.

The Lock-In Effect Is Keeping Supply Thin

Roughly three-quarters of California homeowners hold mortgages below 5%, according to the Legislative Analyst's Office's third-quarter tracker. That lock-in effect keeps many potential sellers in place, because moving would mean trading a low rate for something near 7.4%. It also means the homes that do come to market tend to be motivated sales: relocations, estate and probate situations, downsizing, and families who have outgrown their space.

For buyers, that is a reason to act thoughtfully rather than wait indefinitely. For sellers, it is a reminder that the buyers who are out there are qualified, serious, and rate-sensitive, and that pricing, condition, and presentation carry even more weight than usual.

The Practical Plan for Buyers

• Get three written quotes: Rates vary meaningfully by lender, points, and loan type. Compare total closing costs, not just the headline number.
• Ask about rate buydowns: Paying points can lower your monthly payment, but only makes sense if you plan to stay long enough to recoup the cost.
• Look for assumable loans: A growing number of buyers are saving thousands by assuming a seller's lower-rate FHA or VA mortgage. Ask your lender and agent whether listings you like qualify.
• Budget around today's rate: You can often refinance later if rates improve, but you cannot build equity while you wait on the sidelines. If the payment fits, the timing can work.

The Practical Plan for Sellers

• Price to today's buyer: Overpricing in a rate-sensitive market costs you days on market and can leave buyers wondering what is wrong.
• Make condition count: Paint, flooring, landscaping, and clean staging move the needle. Skip the big remodels buyers may want to do their own way.
• Market the payment math: A skilled agent helps buyers see total cost, not just the asking price, and positions your home for the qualified buyers who are actually out there.
• Be ready to act: With supply thin, a well-priced home in good condition can still draw multiple offers. Have your team ready to respond quickly.

Why Veterans Still Have an Edge

Rates near 7.4% are hard for everyone, but veterans carry tools most buyers do not. VA loans still offer zero down payment, no PMI, competitive rates, and flexible credit guidelines. The VA funding fee is now tax-deductible starting in tax year 2026, which lowers the true cost of a VA purchase. If you have served, your path to ownership may be more accessible than you realize, even in this rate environment.

I have guided veteran families through every kind of market over the last 22-plus years. The best advice is always the same: build the plan around the payment you can live with today, lean on the benefits you earned, and let's create a plan together. Start with the Veterans & Military resource page or reach out directly.

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