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California had a relatively lackluster month for home sales in October as rising rates during August and September weighed on home buyers and further depressed housing inventory. This contrasts with relatively strong economic data for October where job growth re-accelerated and unemployment remained below 5%. However, there are signs that the economy may not be as strong as some labor market indicators suggest, as new unemployment insurance claims trend higher. Fortunately, rates have begun to fall, which should help to motivate some buyers to take advantage of a less competitive winter market.
Mortgage rates drop for 4th consecutive week: After rising sharply for nearly two months straight, Freddie Mac’s average 30-year fixed-rate mortgage has dipped for the past four weeks in a row. Currently, per Mortgage News Daily, rates for a 30 year mortgage are averaging around 7.33%, which is less than 7.44% from last week, and down by roughly 46 basis-points from the high of 7.79% at the end of October. This is still significantly higher than where rates were last year and is helping to keep buyer demand restrained, but the recent reprieve does appear to be helping mortgage applications shrug off some of their downward momentum (even if they have yet to turn positive).
California nets 40K jobs, but unemployment claims rise: California job growth re-accelerated in October as the Golden State added 40,200 net new jobs even as the unemployment rate ticked up to 4.8%. The jobs data is collected in a separate survey from the unemployment data, and the two sources have been disagreeing of late. A recent upswing in new unemployment insurance claims suggests that the unemployment data could be picking up a slowdown in labor market that is yet to be reflected in the jobs numbers and that employment levels for 2023 may be revised down next year. Although this would mean that the economy hasn’t grown as fast as is currently being reported, it may enable the Fed to take a less aggressive tact on interest rates in 2024.
Home sales relatively flat in October amidst higher rates: Sales of existing single-family homes in California continued to be soft in October as the cost of borrowing remained elevated. On an annualized basis, there were more than 240,000 transactions statewide, which was slightly higher than September, but remains near the winter lows reached in 2022. The statewide median price in October took a step back from the month prior, it rose again from the year-ago level for the fourth month in a row. If the market follows its traditional seasonal pattern, we could see home prices leveling off in the coming months from its spring homebuying peak. However, positive year-over-year growth is likely to persist as long as housing supply remains tight.
Mortgage applications remain depressed, but declines slowing: The overall index for new purchase mortgage applications fell on a year-to-year basis for its 130th consecutive week last week. The first two weeks of November are at their lowest level since December of last year and haven’t been below current levels since 2014 suggesting that sales will remain low through the end of the year. However, the pace of recent declines has slowed and last week was the first time new applications were down by less than 20% for the first time since October as rates have moderated slightly.
California mortgage delinquencies remain low: Despite the rapid increase in interest rates this fall, mortgage delinquencies in California barely budged during the third quarter. The Mortgage Bankers Association reports that just 2.3% of all mortgages in California were delinquent during the 3rd quarter of 2023. Although this is up from just 2.2% during the second quarter, it does not show a significant increase in the number of distressed mortgages in the state. With the vast majority of mortgages locked into mortgages with interest rates below 6%, Californians have been able to prioritize their payments and keep their mortgages on track. Although these low rates are likely to continue to weigh on transactions as existing homeowners remain reluctant to walk away from their current mortgages, it is helping to prevent a surge in delinquencies that would be needed to precipitate another foreclosure crisis.
If you would like to discuss if now is a good time for you to buy, sell, or invest in a home or investment property, please feel free to contact me.
Hope you have a great Thanksgiving!
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2174 Stanbridge Ave
Long Beach 90815
3 Bed | 2 Bath | 1,489 SF | $949,900
Nestled in coveted Los Altos... known for being pet & people friendly with awesome schools, parks, walkability & more! This immaculate & inviting 3 bedroom/2 bath home with its upgraded kitchen, baths, living room as well as spacious family room will go fast!
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807 Delaware St
Huntington Beach 92648
4 Bed | 5 Bath | 3,237 SF | $2,750,000
Tesoro Builders has created another extraordinary opportunity to own a brand new, custom designed single-family home in the heart of highly coveted downtown Huntington Beach. The epitome luxury living offers an exceptional beach lifestyle. Starting at $2,750,000, based on options and interest.
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251 Elm Ave.
Long Beach 90802
2 Bed+Den | 3.5 Bath | 1,750 SF | $915,000
This exceptional modern townhome at The Huxton built in 2018 boasts 2 bedrooms, a den/great room, and 4 baths spanning 1,750 square feet. The large rooftop deck off the top-floor den/great room provides an exceptional indoor/outdoor living experience.
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930 E 1st St. #2
Long Beach 90802
1 Bed | 1 Bath | 557 SF | $283,000
Charming top floor, one-bedroom, one-bath gem just steps from the beach in the vibrant heart of Alamitos Beach! This exceptional upper-level, corner unit offers an ideal opportunity for home buyers, savvy investors, or those seeking a beachside retreat.
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2059 W 160th St.
Torrance 90504
2 Bed | 1 Bath | 837 SF | $780,000
Discover Your Dream Home in North Torrance! This charming 2-bedroom home is nestled on a serene residential street, offering you a remarkable opportunity to own in this sought-after neighborhood with great schools.
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1669 E 65th St.
Long Beach 90805
2 Bed | 2 Bath | 1,023 SF | $635,000
Charming Spanish style home with large living room with ample windows allowing plenty of natural Light, original hardwood floors, updated kitchen, central heat and AC, and a permitted rumpus Room with ADU potential.
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4200 Via Norte
Cypress 90630
4 Bed | 3 Bath | 2,915 SF | $1,470,000
This luxurious 4-bed/3-bath Cypress home was expertly upgraded from the inside - out! No stone was left unturned in the vigorous pursuit of redesigning and upgrading this nearly 3,000 sqft Greenbrook home.
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781 W 30th St
San Pedro 90731
3 Bed | 2 Bath | 2,067 SF | $1,225,000
Stunning 3-bed, 2-bath home with breathtaking ocean views in Coastal San Pedro. Experience the beauty of the ocean from the front yard, primary bedroom, and the expansive backyard.
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773 W 30th St
San Pedro 90731
3 Bed | 2 Bath | 1,040 SF | $955,000
Enjoy beautiful ocean and harbor views from the front yard, living room, and the expansive backyard. This 3-bed, 2-bath home offers even more possibilities with an additional enclosed patio area currently staged as a family room and game room.
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1007 Catalina Ave #108
Redondo Beach 90277
2 Bed | 2 Bath | 1,181 SF | $1,175,000
Welcome to Your Dream Beach Home! A Stunning 2 story, 2 bedroom, 2 bath condo located half a block to the beach. Beautifully updated throughout with dramatic high ceilings, gorgeous kitchen, and an abundance of natural light and open space.
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211 Saint Joseph
Long Beach 90803
3 Bed | 2 Bath | 1,057 SF | $1,299,000
Welcome to this charming Belmont Shore home located just 4 blocks to the beach! Enjoy the open concept floor plan, granite countertops, hardwood flooring, and a serene primary suite with a spa-like bathroom. Don't miss this opportunity for coastal living at its finest!
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Tim Majka
(562) 900-9430
Tim@ImagineRealty.com
www.ImagineRealty.com
DRE#01399855
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