The housing market remains slow as it enters the traditional holiday season. With interest rates rising to the highest level in the last 20 years, both sales and prices had a soft month in October. While last week’s increase in mortgage applications due to the recent decline in rates is encouraging news, market sentiment – including those of builders – continues to lean more towards the side of caution.

 

California home sales bear brunt of higher interest rates in October: Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 274,040. October marked the 16 consecutive month of negative year-over-year growth, and it was the third time in the last four months that sales dropped more than 30%. Homes were listed on the market for a median of 23 days before escrow opened, more than doubled from that in October of last year when the median was 11 days. Inventory inched up but remained low by historical standards. Tight supply has kept prices afloat thus far, even as demand has pulled back significantly. Nevertheless, October had the slowest year-over-year price growth in the last 29 months and prices should continue to moderate in the months ahead.

 

Mortgage applications increase as mortgage rates tumble: Following the latest inflation data release which suggests a slowdown in overall price growth in the economy, mortgage rates decreased last week as Treasury yields dropped sharply. The 30-year fixed-rate mortgage, according to Freddie Mac, averaged 6.61% as of November 17. This was down from 7.08% the week prior and was the biggest week-to-week decline in the last four decades. In response to the decline in rates, total mortgage applications recorded a weekly gain of 2.7% for the weekly ending November 11, 2022. Most of the increase in application activity was due to the seasonally adjusted increase of 4% in purchase applications from the week prior. Refinance activity, on the other hand, continued to move downward by another 2% from the previous week and was down 88% from the level observed one year ago.  

 

Builder confidence declines for 11 straight months: The index by the National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index (HMI) measuring builders’ sentiment towards the housing market, dropped another 5 points to 33 in November. This was the 11th consecutive decline and was the lowest builders’ confidence reached since June 2012, outside of the onset of the pandemic. The drop in builders’ sentiment was attributed primarily to elevated interest rates, persistently high building material costs, and a growing affordability challenge that continues to dry out a once overflowing pipeline of buyer traffic. Nearly 3 in 5 builders were using incentives to attract buyers into the marketplace. One quarter of them (25%), for example, said they paid points for buyers to buy-down mortgage rate. Another one-third (37%) said they cut prices in November, a surge from 26% in September.

 

With interest rates starting to ease we are seeing some new opportunities for buyers and sellers. Lenders are offering options for home buyers to buy down their interest rate and sellers in some cases are offering credits to help buyers obtain a more affordable rate. If you would like to discuss today's market and whether now is a good time for you to buy or sell, give me a call at (562) 900-9430.

 

Hope you have a great Thanksgiving!

 

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605 Redondo Ave. #305 

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2 Beds | 2 Baths | 1,121 SqFt | $2,500

 

Beautiful 2 bedroom, 2 bath condo with parking and inside laundry in Bluff Heights.

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2 Beds | 2 Baths | 898 SqFt | $425,000

 

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4 Beds | 2 Bath | 1,612 SqFt | $820,000

 

Welcome home to this beautiful 4 bedroom home in a highly sought after neighborhood in Carson. 

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2 Beds | 2 Bath | 1,506 SqFt | $440,000

 

Why rent when you can own! Great opportunity to own this 2 bedroom 2 bath home in a gated community!

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819 Atlantic Ave. #1

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2 Beds | 2 Bath | 1,219 SqFt | $565,000

 

Absolutely beautiful 2-story condo located in prime Long Beach just blocks away from downtown and the beach.

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2 Beds | 1 Bath | 1,158 SqFt | $785,000

 

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2 Beds | 1 Bath | 949 SqFt | $840,000

 

Looking for a home that is in pristine condition, immaculately clean, open, bright & cozy, in a premier location, on a tree lined street and with "wow factor" curb appeal and reasonably priced? Look no further.

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3 Beds | 4 Baths | 3,358 SqFt | $1,819,798

 

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2 Beds | 1 Baths | 702 SqFt | $550,000 

 

Must see remodeled two-bedroom one bath home in Long Beach! Close to schools, shopping, restaurants, and freeways this home is conveniently located to all.

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2 Beds | 3 Baths | 2,014 SqFt | $1,575,000

 

Absolutely breathtaking ocean views from every room in this oceanfront penthouse condo at the Ocean Club

100 W 5th St #3C

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3 Beds | 2 Baths | 2,147 SqFt | $955,000

 

Amazing loft at the Kress Lofts in Downtown Long Beach. This was the architect's home and features the largest floor plan in the building.

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