“Within the last 30 days, we’ve seen everything from low 6% to low 7%,” says Jason Lerner, producing area manager at George Mason Mortgage in Towson, MD. “That’s exceptionally volatile.”

The same is true throughout Southern California.

It has, in fact, been a wild ride. Mortgage interest rates have been up, down, and then up again as investors try to guess the Federal Reserve’s next move. The Fed has been steadily hiking its own short-term rate to bring down inflation by cooling the economy.

When the Fed raises its own rates, mortgage rates have often followed. And Fed officials have indicated another rate increase—or two—is likely this year.

The results of the Fed’s actions have been mixed. Inflation has tumbled down to 3% annually in June. That bit of good news caused mortgage rates to fall below 7% on Wednesday. But while that’s a big improvement from when inflation was running at 9.1% during the peak in June 2022, it’s still higher than the Fed’s 2% goal. Other data, such as recent employment reports, shows the economy is still stronger than the Fed would prefer.

Right now, many homeowners are reluctant to sell. Most sellers are also buyers who don’t want to give up their ultralow mortgage rates to take out another mortgage with a rate that’s likely more than double what they have now. Many are waiting for rates to come down, at least to the 5% range, before listing their properties.

“Existing homeowners with a very low mortgage rate [have] very little incentive to decide to sell,” says Danielle Hale, chief economist of Realtor.com. The result? “There’s nothing to buy, it’s expensive to buy what’s available to buy.”

So when a move-in ready home in a desirable area is listed at a good price, it’s a bit of a unicorn in today’s market. Hordes of buyers typically descend, and that fierce competition bids up the price of the home.