Rental Market Update • July 2026
Leon Oranskiy, CEO, LendingPlace • The Landlord Ledger, Issue 01 • July 21, 2026
LA Rents Down 9%: What the Numbers Mean, and Which Rent Cap Applies to Your Property
If you have listed a vacancy in Los Angeles recently, you already felt it: the market has shifted. According to Zumper, which tracks median asking rents from over a million active listings nationwide, the median rent in Los Angeles now sits at $2,500 a month, down 9% from a year ago. Vacant units are also sitting longer, with some market trackers reporting average days on market above 90.
One note of honesty on the data, because I think you deserve it. Zumper measures asking rents on units currently listed for lease, which is the number that matters most when you have a vacancy to fill. Other trackers that measure the broader stock of occupied units, such as Yardi Matrix, show rents closer to flat year over year. The truth for most landlords lands somewhere in between: your in-place tenants are not paying 9% less, but the unit you are re-listing today prices noticeably below where it would have last summer, and concessions like a free month are back in a big way.
Why rents are softening
Three forces are converging. First, a wave of new units delivered across greater LA over the past two years, mostly in higher-amenity buildings that compete hard for the same renters. Second, renter demand has cooled from the post-fire displacement surge of 2025, which had temporarily pushed rents up in certain corridors. Third, tenants simply have more choices, so well-priced and well-presented units lease, while overpriced ones sit and eventually take a concession anyway.
The practical takeaway: if you have a vacancy, price it to the current market from day one. A unit that sits 90 days at an aspirational price costs you more than one that leases in two weeks at the market rate.
Which rent cap applies to your property? A two-track system in LA City
Now for the rules, because in the City of Los Angeles there is no single answer to "how much can I raise rent." It depends on which track your property falls under.
Track 1: RSO properties
The city's Rent Stabilization Ordinance generally covers multifamily properties (two or more units) built on or before October 1, 1978, within LA City limits. For these units, the annual allowable increase effective July 1, 2026 through June 30, 2027 is 3%. Two important changes came with the city's recent overhaul of the ordinance:
- The old add-on that allowed an extra 2% for landlords who pay tenants' gas and electricity has been eliminated.
- Going forward, the annual cap follows a new formula tied to a reduced share of inflation, which is expected to keep increases in a lower range than the old system.
You can verify whether a specific property is under the RSO by looking up the address on the city's ZIMAS parcel tool at zimas.lacity.org.
Track 2: Non-RSO properties under the statewide cap (AB 1482)
If your LA City property is not covered by the RSO, it likely falls under California's Tenant Protection Act, AB 1482, as long as the building is more than 15 years old. Under AB 1482, the maximum annual increase is 5% plus local inflation, capped at 10%. For the Los Angeles area, that currently works out to about 8%.
Some properties are exempt from both systems. The most common exemptions are buildings less than 15 years old and single-family homes or condos owned by individuals (not corporations or REITs), provided the required exemption language appears in the lease. For fully exempt properties, there is no cap, though notice requirements still apply: 30 days' written notice for increases of 10% or less, and 90 days for anything above 10%.
New landlord requirements to know for 2026
Beyond rent caps, a few new obligations took effect this year that every LA landlord should have on their radar:
- Stoves and refrigerators are now mandatory (AB 628). Effective January 1, 2026, landlords must provide and maintain a working stove and refrigerator. This applies to all new, amended, or renewed leases. If a housing inspector finds a missing or non-working appliance, you get a Notice to Comply and at least 30 days to fix it before fines can follow.
- Electronic security deposit returns (AB 414). If you received rent or the deposit electronically, you can now return the deposit electronically unless the tenant agrees to another method in writing. This speeds up compliance with the 21-day return deadline.
- Multilingual eviction documents (AB 863). Eviction summons now use a single multilingual form, and if a tenant has notified you of a language preference in Spanish, Chinese, Tagalog, Vietnamese, or Korean, related notices must be provided in that language.
The Bottom Line
Softer asking rents plus tighter caps mean your levers as an owner have shifted from raising rent to controlling vacancy, retaining good tenants, and managing your cost of capital. Two of those three are operational. The third is where I can help.
This article is for informational purposes only and is not legal advice or a commitment to lend. Rent regulations change frequently; consult the Los Angeles Housing Department, your city's rent program, or an attorney for guidance on a specific property. Market data reflects third-party sources current as of publication and is not guaranteed.
More Listings, Flat Prices: The Best Buying Window LA Investors Have Seen in Years
DSCR Loans Explained: The Loan That Qualifies on Your Rent Roll, Not Your Tax Returns
CONFORMING LOAN A conforming loan is a mortgage that meets lending rules set by Fannie Mae and Freddie Mac and is within loan limits set by the Federal Housing Finance Agency (FHFA). Conforming loans are the most frequently used type of mortgages. If your credit score is above 620 and a loan amount is within $647,200, there is a good chance this is the type of home loan you’ll use. If you are considering using this type of loan, here’s what you should know about the requirements, rates, and loan limits for a Conforming Mortgage Loan. ABOUT CONFORMING LOANS Conforming loans are conventional loans. This simply means they are not funded by the federal government (unlike FHA, VA, and USDA loans). Conventional loans can be conforming—meaning they conform to Fannie Mae and Freddie Mac’s lending rules—or non-conforming (non-QM), meaning they don’t follow Fannie and Freddie’s guidance. Most of the mortgages in the U.S. are conventional conforming loans. However, non-conforming loans can be useful in special circumstances. Examples of non-conforming mortgages include jumbo loans (which exceed the conforming loan limit) and bank statement loans, no income verification loans, and DSCR mortgage loan (rental income based mortgage loans). For a borrower with 5% down and a credit score above 620, a conforming loan is often the most affordable option. Those with a lower credit score or special circumstances (for example, veterans) might choose between a conforming loan and a government-backed loan. CONFORMING LOAN REQUIREMENTS To qualify for a conforming loan, you’ll need a: Credit score of 620 or better Debt-to-income ratio (DTI) lower than 45% in most cases Down payment of 3% or more Stable record of employment and income going back at least two years It is not that hard to qualify for a conforming loan. You do not need 20% down or a perfect credit score. Lenders can often work with you; if your finances are a little weaker in one area but stronger in another, that could help you get approved. One thing to remember is that these are only requirements set by Fannie Mae and Freddie Mac. The actual lenders that can help you with conforming loans set their own requirements. Although Fannie Mae and Freddie Mac are not mortgage lenders, their role is to simply be in the background. CONFORMING LOAN LIMITS Fannie and Freddie are both regulated by the Federal Housing Finance Agency (FHFA), which is why their loan products are so similar. And, each November, the FHA updates its loan limits for the following year. These limits set the maximum amount you can borrow using a conforming loan. Most single-family homes in the U.S. are covered by the standard loan limit, which is $647,200 in 2022. If you’re buying a home in an area with above-average home prices, you may be able to borrow more: Anything between $647,200 and $970,800, depending on how high home prices are in your area. Conforming loan rates and PMI Conforming mortgages are considered low-risk thanks to Fannie and Freddie. That you can get a lower rate on these mortgages However, one important thing to note is that conforming loans depend heavily on your personal finances; specifically, on your credit score and down payment. The better your score and the bigger your down payment, the lower your interest rate will be. Something else that is important to understand is that conventional loans with less than 20% down require private mortgage insurance (PMI). This adds an additional monthly fee that helps protect lenders because low-down-payment loans are considered riskier. On the bright side, conforming loan PMI can be removed later on, whereas FHA mortgage insurance is often permanent. Conforming loan rates are often the most competitive on the market, aside from VA loan rates. But when this was written, mortgage rates were very volatile. And, when markets are disrupted, comparative rates across different mortgage types can temporarily fall out of alignment. OUR CONFORMING LOAN DETAILS: 30 YEAR CONFORMING: LTV up to 95% (MI applies fo LTV > 80%) Minimum FICO 620 “Full Doc” with up to 50% DTI W2 or Self Employed Borrowers Purchase Loan, Rate and term, or Cash-Out refinance Current conforming limit in CA for a single-family unit is $548,250. High Balance Conforming loan limits vary for each county Restrictions apply. Rates are subject to change without notice 15 YEAR CONFORMING: LTV up to 95% (MI applies for LTV > 80%) Minimum FICO 620 “Full Doc” with up to 50% DTI W2 or Self Employed Borrowers Purchase Loan, Rate and term, or Cash-Out refinance Current conforming limit in CA for a single-family unit is $548,250. High Balance Conforming loan limits vary for each county Restrictions apply. Rates are subject to change without notice
OVERVIEW As a self-employed person, you work hard to build a business. You take pride in what you have achieved and that your work ethic has put you in a position to be able to buy a home. So why should you be worried about being self-employed when submitting a mortgage application? Buying a home in today’s competitive real estate market can be challenging, period; that process can be even more of a challenge if you are self-employed. The part that can be the most difficult is documenting your income. Proving your cash flow as a business owner, contractor, or freelancer can require more paperwork than for W-2 employees. SO WHAT SHOULD YOU DO? You can start off by providing your lender with your tax returns, showing how much money you claimed. Although it is tempting to do so, lowering your taxable income by writing off expenditures could mean that you will not qualify for the home you would like. In fact, the lender will look at your debt-to-income ratio, which means if you have any credit card debt, auto loans, or student loans, the amount of your minimum monthly payments will be compared to your monthly income. If that ratio is too high, your dreams of owning a home will not become reality. How should you move forward? Thankfully here at LendingPlace we specialize in self-employed mortgage loans. We have access to special loan programs specifically for self-employed home buyers. The loan programs do come with a higher APR than some of the traditional mortgage programs; however, if you haven’t done your best at documenting your income, these programs could help. BANK STATEMENT ONLY LOAN The first program to consider is a bank statement-only loan. Bank Statement Only Mortgage Loans don’t require you to show your tax returns, W-2s, pay stubs, or employer verification forms. Instead, you can use your personal bank accounts, or personal and business bank accounts, to prove how much you make every month and year. Here are some important Bank Statement Mortgage Loan details: Business deposits verified by 3, 12, or 24 months of bank statements LTV up 90% for purchase and R/T AND cash-out refinances. Minimum FICO Score 620 No Business or Personal Tax Returns! Available for Primary, Second Homes, or Investment Properties 30-year fixed and 5/7/10 ARM options Interest-only payment options. Reserves: 6 to 12 months of PITI Loan Amount Limits: $200,000 to $3,000,000 Rates starting at 5.25% If bank statements do not work for you, we can also do a profit and loss statement loan. This program has the same credit score requirements as the Bank Statements Only Loan but requires at least 20% down. Your P&L statement will need to be prepared by a licensed accountant in order to be considered. WHAT IS P&L? A P&L, or profit and loss statement, is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a quarter or fiscal year. So basically, instead of using tax returns, we allow the business owner to have their licensed tax preparer provide a 1-2 year profit and loss (P&L) statement as income, which often provides a more accurate picture of your income. There are no prepayment penalties for owner-occupied and second homes, so the loan can be refinanced if desired as soon as the applicant qualifies for a traditional home loan. Many of our clients use this program to buy their dream home and decide to refinance it into a traditional loan once they and their tax advisers determine the optimal time. It allows the business owner to take control and buy a home on their terms. This loan program is similar to our Bank Statement Program, but the documentation requirements are much easier than providing 12-24 months of bank statements. Here are some important Profit and Loss (P&L) details: LTV up 80% for Purchase and Rate & Term Refinance/up to 75% for Cash-Out Refinances Minimum FICO 620 P&L prepared by a licensed accountant required Available for primary and second homes 30-year fixed and 5/7/10 ARM options Interest-only payment options Reserves 6 to 12 months of PITI—Cash-Out funds can be used as reserves! Loan Amount Limits: $200,000 to $3,000,000 Lastly, we can help you with a no-income-verification loan. The credit score requirement is 640, and the down payment must be at least 20% to be approved. NO INCOME VERIFICATION LOAN No-income verification mortgages, also known as stated-income mortgages, allow borrowers to qualify using non-standard income documentation. While most lenders ask for your tax returns, no-income verification mortgages instead use other factors such as available assets, home equity, and overall cash flow. This makes it easier to get a home loan if you’re self-employed or rely on seasonal commissions. Here are some important No Income Verification Mortgage details: LTV up 80% for Purchase and Rate & Term Refinance/up to 75% for Cash-Out Refinances. Minimum FICO credit Score: 740+ No income or employment documentation required, no VOE Just one month bank statement for Proof of Funds Available for primary and second homes 30-year fixed and 5/7/10 ARM options Interest-only payment options. Reserves: 3 to 18 months of PITI (based on borrower’s FICO)—cash-out funds can be used as reserves! Loan Amount Limits: $200,000 to $3,000,000 Rates starting at 6.875% The Process Isn’t Totally Different. Overall, the process of applying for and being approved for a mortgage as a self-employed worker requires a couple of extra steps, but it isn’t the end of the world. Before you apply, you should still make sure your credit score is in good shape and that other debt is minimal. Overall, as long as you have kept track of your income and expenses in a somewhat easy way to verify, you should be in good shape. If you are in need of a self-employed mortgage loan, give us a call at 818-900-2118.
The average time to close a mortgage ranges from 45 to 60 days, but many will close in 30 days or less This is how much time it takes from starting a loan application to getting your “loan funding,” which is when the new home or refinance loan is officially a done deal. Depending on the type of loan you are doing, credit profile, and loan purpose (purchase or refinance), your mortgage might be take a longer time or shorter time to close If you have not started the application, or if you have not found the home you want to buy, the time it takes too close could be longer. If you’re a first-time buyer or buying a home once again, you need to consider the house-hunting process. You need an offer accepted to get approved for a mortgage, so you can’t start the process in full until you’ve found the home you want. This could add an additional 1-2 months or more onto your timeline. Closing timeline: if you haven’t found a house yet, closing on a house takes time. Exactly how much time depends on your “starting point.” If you still have not found your dream home, you could still spend a month or two just visiting houses with a real estate agent. Once you find it, it could take one to five days to make an offer, have the seller look at your offer, negotiate, and come to an agreement on price and other aspects of the real estate transaction. Once this is done, you can make a full application for your home loan and get final approval for the specific home you’re buying You should always get a pre-approval before you start looking for homes to speed up the process. Don’t let that 30 to 60 days go to waste. Getting pre-approval means the lender gives a thumbs-up to all aspects of your home loan besides the property. Once you have an accepted offer, your lender already has a serious head start on your final approval. Closing timeline if you’ve already found a house If you’ve found a home already, it will probably take between 45 and 60 days to close the home mortgage, based on national averages. Keep in mind your situation can vary widely depending on your credit score, employment history, and other aspects of your financial life. Furthermore, you may be able to waive the appraisal requirement. But you can’t count on an appraisal waiver. Be careful not to over-promise closing speed to your seller. Your purchase agreement will state a closing date. You are expected to stick to it, or potentially lose the house and your earnest money. Above all, have a conversation with your loan officer about how long it will take to close your mortgage loan. Ask for a realistic or even pessimistic assessment, factoring in underwriting, processing, the appraisal, condition review, and closing/funding. It’s better to guess “long” than to have overly optimistic time frames you can’t reasonably hit. HOW LONG AFTER THE APPRAISAL TO CLOSE A MORTGAGE? If your house’s appraisal is complete, congrats. You’ve finished one of the longest steps in the mortgage process. You’re probably thinking about how much longer you’ll have to wait for the final walkthrough and your closing day. Typically, mortgage underwriters work on your approval while the home appraisal is going on. So when the appraisal comes in, the lender should be more or less ready to go. It shouldn’t take longer than two weeks to close on your mortgage after the appraisal is done. It shouldn’t take longer than two weeks to close after the appraisal is done. That’s not a promise, though. There are still plenty of potential hang-ups. Your lender could find an issue on the appraisal (peeling paint, a roof in need of repair, etc.) that needs to be addressed. Or the seller might have a problem with the home they are purchasing, delaying the sale. Don’t let these things worry you. They happen all the time and usually are resolved in one way or another. Still, be observant with your lender. Make sure it is speeding your file through the rest of the loan application process. MORTGAGE CLOSING TIMES: Conventional purchase: 47 days to close Conventional refinance: 48 days to close FHA purchase: 50 days to close FHA refinance: 54 days to close Keep in mind closing times vary widely depending on the situation. A cash buyer, for instance, might close in a matter of days. A mortgage borrower with a questionable credit report and income verification may need 60-90 days or longer.
Here Are Some Key Features of Non-QM Loans: Flexible underwriting: Unlike conventional loans, non-QM lenders use flexible underwriting criteria that take into account the borrower’s whole financial picture, including assets, income, and credit history. Non-standard documentation: Non-QM loans may require non-standard documentation, such as bank statements, asset statements, or letters of explanation, to verify income and assets. Alternative income sources: Non-QM lenders may consider alternative income sources, such as rental income, self-employment income, or investment income, that traditional lenders may not consider. Higher interest rates: Non-QM loans typically have higher interest rates than conventional loans, as lenders assume more risk by lending to borrowers who don’t meet the strict requirements of GSEs. Shorter loan terms: Non-QM loans may have shorter loan terms, such as 15 or 20 years, instead of the traditional 30-year term, which can help borrowers pay off their loan faster. Non-QM loans can be a good option for borrowers who have unique financial situations, such as self-employed individuals or those with fluctuating income. However, they may not be the best option for everyone, as they often come with higher interest rates and stricter terms. It’s important to carefully consider all loan options and work with a trusted lender to find the right loan for your needs.
Spring and summer typically witness an increase in rent prices as more individuals search for new rental homes. However, nationwide, rent prices have remained relatively stable due to a combination of lower demand and an influx of new rental properties. Nevertheless, certain states have experienced a rise in median rents due to an influx of new residents, as highlighted in a May report from Rent.com. The prevailing trend indicates that people are relocating to areas with robust economies that still offer affordable rent and housing options. Even in states with the fastest year-over-year rent increases, the median rent remains comparatively low when compared to the national median. In April, national rents saw a mere 0.29% year-over-year increase. From March to April, there was a month-over-month decrease of -0.23%, following a 1.77% upswing from February to March. Currently, the national median rent stands at $1,967. Although the rate of decline has slowed, it is uncertain whether the national median rent has reached its lowest point. Nevertheless, nearly 79% of markets continue to experience year-over-year rent growth. Some Southern and Midwestern states have witnessed double-digit rent increases. Interestingly, all ten states with the highest rent price growth maintain median rents below the national average. With the exception of New Hampshire, most of these states are located in the South and Midwest. South Dakota leads the pack with a staggering year-over-year increase of almost 29% and a month-over-month increase of 2.9%. This surge in rents is attributed to rising housing costs and property taxes, particularly in cities like Sioux Falls, which are attracting a significant influx of new residents. The national rental market has experienced a cooling effect on rent increases due to an increase in the supply of multi-family housing units. Additionally, concerns about a potential recession have dampened the demand for rental properties as more individuals opt to stay in their current homes or share living spaces with family or roommates. This trend may persist, particularly if the U.S. economy enters a recession. The rental market shares the same uncertainty as the housing market, although some investment firms are speculating on a long-term rental boom in 2024 and showing interest in build-to-rent developments as promising investment opportunities. In summary, rent prices have fluctuated since the previous autumn but have remained relatively stable year-over-year. The sales of existing homes have also experienced fluctuations, and uncertainty looms over the future of the U.S. economy. The Federal Reserve could potentially achieve a controlled economic slowdown, or unemployment rates may rise, leading to further declines in housing prices. Investors should diligently analyze all available information, including changes in rent prices, to make informed predictions about individual markets. It is crucial for them to prepare for various outcomes and approach investment decisions with contingency plans in place. The following states have seen the largest year-over-year decreases in rent prices across their cities, totaling only nine states. In various Mountain West states, rents are cooling off after a surge in migration during the early stages of the pandemic. For instance, cities such as Phoenix and Austin experienced a pandemic-driven boom, and now rent prices are declining, consequently impacting their respective states. California, notorious for its high rents, has experienced a stagnant year-over-year rent market, while Florida, New York, and Tennessee have witnessed rent increases. Although rent prices have decreased year-over-year in only about 21% of markets, nearly 43% have experienced a decline on a monthly basis. The national rental market has experienced a cooling effect on rent increases due to an increase in the supply of multi-family housing units. Additionally, concerns about a potential recession have dampened the demand for rental properties as more individuals opt to stay in their current homes or share living spaces with family or roommates. This trend may persist, particularly if the U.S. economy enters a recession. The rental market shares the same uncertainty as the housing market, although some investment firms are speculating on a long-term rental boom in 2024 and showing interest in build-to-rent developments as promising investment opportunities. In summary, rent prices have fluctuated since the previous autumn but have remained relatively stable year-over-year. The sales of existing homes have also experienced fluctuations, and uncertainty looms over the future of the U.S. economy. The Federal Reserve could potentially achieve a controlled economic slowdown, or unemployment rates may rise, leading to further declines in housing prices. Investors should diligently analyze all available information, including changes in rent prices, to make informed predictions about individual markets. It is crucial for them to prepare for various outcomes and approach investment decisions with contingency plans in place.
