Since the beginning of last year, mortgage rates have increasedloanRate of interestAnd high housing prices have discouraged many home buyers. According to the Pasadena Star-News,CaliforniaAverage home sales volume last year fell 32% compared to the same period last year, hitting a record low.
According to California Association of Realtors (CAR) data, the average number of home sales in California in the past 12 months through August was 271,800, down 32% from the average for the same period last year.%, the slowest since January 1990. The 12-month pace was the fastest since records began, breaking the all-time low set in April 2008 at the beginning of the Great Recession.
Last year, home sales declined to varying degrees in almost all areas of California; Southern California saw a 33% decline, followed by the Bay Area, Central Valley and Central Coast. Both fell by 30%.
The report notes that although the average home price in California reached $859,800 in August, the third highest point on record, it does not mean the market has regained strength. There are currently very few buyers who can afford to purchase a home, and it appears that this small group is competing fiercely for the few homes on the market. According to CAR estimates, the supply of homes for sale in California is equal to 2.4 times August sales, down 4% month-over-month and 14% year-over-year, and nearly below the 33-year average. 58% less.
Additionally, the average interest rate on a 30-year fixed-rate mortgage was 7.1% in August, up from 6.8% last month and 5.2% a year earlier. Calculated based on the average home price in August, assuming California home buyers have a down payment ratio of 20%, their monthly mortgage payment will be as high as $4,610 when the mortgage interest rate is 7.1%. This number is the highest since records began. The maximum monthly payment is 6% higher than last month, 25% higher than a year ago, and 122% higher than before the outbreak in February 2020.
The second quarter Housing Affordability Index released by CAR shows that only 16% of households in California are economically able to purchase a moderately priced single-family home. CAR analyzed in the report that interest rates have risen again since April and housing inventory is tight, causing California home sales to hit a low in August. However, even if mortgage interest rates will not fall significantly in the short term, macroeconomic fundamentals are expected to ease from the fourth quarter of this year, and mortgage interest rates will gradually decline in the next few months, leading to supply and Demand will give confidence to both. Sides of the real estate market…
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