California median home price reaches highest level in 15 months
CALIFORNIA ASSN. OF REALTORS®
Rising mortgage rates and a continued shortage of homes for sale hampered California home sales for the third straight month in August, while the statewide median home price registered its biggest year-over-year gain in 14 months, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
“Despite persistently high mortgage rates and availability of homes remaining extremely tight, there’s still solid interest from prospective buyers,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “The highly competitive housing market continued to provide support to home prices, with the statewide median price steadily improving since early 2023. As California housing prices continue to stabilize, buyers and sellers on the sidelines will get back into the market once interest rates begin to moderate in the fourth quarter.” Read more.
Home purchases fell through at the highest rate in nearly a year Redfin
Residential real estate deals are falling through at the highest rate in almost a year as high mortgage rates give homebuyers sticker shock, according to a new report from Redfin. Nationwide, nearly 60,000 home-purchase agreements were canceled in August, equal to 15.7% of homes that went under contract that month. That’s up from 14.3% a year earlier and marks the highest percentage since October 2022, when mortgage rates surpassed 7% for the first time in two decades.
The average interest rate on a 30-year-fixed mortgage was 7.07% in August. At one point last month, it hit 7.23%—the highest since 2001—sending the typical homebuyer’s monthly payment up significantly from last year. Read more.
California housing market will rebound in 2024 as mortgage rates ebb CALIFORNIA ASSN. OF REALTORS®
Slower economic growth and cooling inflation will bring down mortgage interest rates in 2024 and create a more favorable market environment to spur California home sales next year, according to a housing and economic forecast released by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
“2024 will be a better year for the California housing market for both buyers and sellers as mortgage interest rates are expected to decline next year,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “A more favorable market environment with lower borrowing costs, coupled with an increase in available homes for sale, will motivate buyers and sellers to reenter the market next year. First-time buyers who were squeezed out by the highly competitive market in the last couple of years will try to attain their American dream next year. Repeat buyers who have overcome the “lock-in effect” will also return to the market as mortgage rates begin to trend down.” Read more.
Housing starts drop to lowest level since June 2020 MarketWatch
Construction of new U.S. homes fell 11.3% in August—falling short of Wall Street expectations—as builders scaled back new projects to focus on completions. The pace of construction reversed course and fell as mortgage rates stayed over 7%, dampening home-buying demand. The last time construction of new homes was at this level was in June 2020.
So-called housing starts fell to a 1.28 million annual pace from 1.45 million in August, the government said Tuesday. That’s how many houses would be built over an entire year if construction took place at the same rate every month as it did in August. Read more.
Surge in refinancing drives mortgage demand CNBC
Last week the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 7.31% from 7.27%, with points remaining unchanged from 0.72 for loans with a 20% down payment.
Applications to refinance a home loan jumped 13% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Application volume was still 29% lower than the same week one year ago. Read more.