While home sales and employment in California continued to march forward in February, recent banking turmoil has increased uncertainty on many fronts, including the housing market. Despite declines in long-term yields, ongoing pressures in the financial system could cause smaller banks to tighten lending standards and may have an adverse effect on housing demand. The Fed, nevertheless, enacted its ninth rate hike since March 2022 but hinted there might only be one more to come before the end of the year. Mortgage rates, as a result, slid for the second consecutive week and reached their lowest level in a month. This has motivated many buyers to come off from the sidelines as mortgage applications increased for the third week in a row.
More favorable interest rates perk up California home sales: The lowest mortgage rates in five months helped boost California home sales to reach above the 250,000-unit annualized sales pace for the first time in four months. February’s sales pace was up 17.6% on a monthly basis from 241,520 in January and down 33.2% from a year ago, when a revised 425,120 homes were sold on an annualized basis. Despite the third straight monthly improvement, sales of existing single-family homes in California remained below the 300,000-unit pace for the fifth consecutive month. A shift toward more home sales in the lower-price segments is expected to continue to further soften home prices. However, with the availability of homes remaining extremely tight and housing supply conditions not expected to improve any time soon, prices should find bottom later this year as interest rates stabilize.
New home sales climb for the third consecutive month: New home sales jumped 1.1% from January to a seasonally adjusted annual pace of 640,000 homes in February. While this was the third straight month of growth for sales – which suggests that the market might have already found its bottom, new homes remained 19.0% behind the same month of last year. Regionally, sales in the Northeast and Midwest saw a decline, while the South and the West grew by single digits. The uptick in sales pace in February chipped away 0.7% of the new home inventory, dropping the months of supply to 8.2 at the current sales pace. Builders are being cautiously optimistic however, despite mortgage rate volatility and economic uncertainty. The boost in builders’ confidence is likely attributed to the intensified market competition and solid price growth observed in recent weeks, resulted from more buyers turning to the new home market as supply remains tight in the existing housing stock.
Fed hikes rates by 25 basis points and indicates future increases are near an end: The Federal Reserve bank enacted its ninth rate hike since March 2022 by a quarter of a percent, taking the target range of its federal funds rate to 4.75% - 5%. After recent bank failures, there were doubts that the Federal Open Market Committee (FOMC) would continue with an aggressive stance in its rate movements. Fed policymakers confirmed last week that while they remain determined to bring inflation under control, it is too soon to determine the extent of the effects of the latest banking turmoil. Additional information will be needed to make their next assessment, but the Fed suggested that there is at least one more rate hike before the end of the year.
Mortgage applications inch up as rates decline: Even though overall application volume remained at relatively low levels, both purchase and refinance applications increased for the third consecutive week as borrowers continued taking advantage of the lowest mortgage rates in a month. The Market Composite Index, a measure of mortgage loan application volume, increased 3.0% on a seasonally adjusted basis from one week earlier. Mortgage rates declined as uncertainty over the health of the banking sector and worries about the broader impact on the economy continued to grow. According to Freddie Mac’s weekly Primary Mortgage Market Survey® (PMMS®), the 30-year fixed-rate mortgage (FRM) averaged 6.42% as of March 23, 2023, down more than 30 basis points from its most recent peak at the beginning of March.
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.
|
|
Looking To Move Out Of State?
Save Thousands for Dollars With Our
Relocation Program
As a top agent with the #1 brokerage in North America, I have relationships with some of the top agents all over the country. I have recently helped some clients move to Tennessee, Arizona, Nevada, Montana, Texas, Florida, and other states with the help of my KW Relocation network of local experts to help them find their next dream home. My network of agents saved them thousands of dollars and reduced the time and hassle of finding a new home in another state.
If you or someone you know is looking to relocate to a new city or state, contact me to tap into the power of my network of experienced agents throughout North America.
|
|
|
939 Appletone Ave #3
Long Beach 90802
1 Bed | 1 Bath | 640 SqFt | $349,900
Nicely updated top floor end unit 1 bedroom 1 bath condo in the heart of Alamitos Beach just a short walk to the beach. Open House Sunday 12:00 - 3:00 pm.
|
|
|
199 Prospect Ave
Long Beach 90803
5 Beds | 3 Baths | 2,557 SqFt | $1,895,000
Stunning 4 bedroom, 2 bathroom Belmont Heights Tudor with a nicely-sized Guest Quarters/Rental Unit/Home Office above the 2-car garage!
|
|
|
2217 Westwind Way
Signal Hill 90755
4 Beds | 4 Baths | 3,516 SqFt | $2,595,000
Stunning panoramic views from this custom hilltop home, nestled at the end of the cul-de-sac on a double corner lot. Amazing city and ocean views from Newport Beach to the skyscrapers of downtown LA.
|
|
|
7887 Lampson Ave #54
Garden Grove 92841
2 Beds | 2 Baths | 800 SqFt | $110,000
Beautifully updated 2 bedroom, 2 bath home in Garden Terrace Estates.
|
|
|
100 W. Louise St.
Long Beach 90805
3 Beds | 2 Baths | 1,031 SqFt | $500,000
Great opportunity to own this 3 bedroom, 2 bath single family home on a corner lot. Bring your imagination as this fixer has so much potential.
|
|
|
5250 E. Lomita Ave.,
Orange 92869
32,924 SqFt of Residential Land | $650,000
Located on a private street with custom homes, this 32,924 SqFt lot comes with plans for a 5000+ SqFt custom home featuring amazing views.
|
|
|
5221 E Patterson St.,
Long Beach 90815
4 Beds | 2 Baths | 1,627 SqFt | $850,000
Wonderful home in the Stratford Square area of Long Beach. Lovely neighborhood known for its award winning schools.
|
|
|
64 Corona Ave.,
Long Beach 90803
3 Beds | 3 Baths | 1,532 SqFt | $1,550,000
Amazing single-story bungalow on an oversized lot located less than a block to the ocean in the heart of Belmont Shore!
|
|
|
2204 Conquista Ave.,
Long Beach 90815
4 Beds | 3 Baths | 2,629 SqFt | $1,075,000
Beautifully upgraded 4 bedroom, 3 bathroom home in the highly desirable Los Altos area of Long Beach. This spacious two-story pool home is perfect for entertaining.
|
|
|
6490 E Saddle Dr
Long Beach 90815
3 Beds | 3 Baths | 2,845 SqFt | $1,720,000
Presenting this Amazing turnkey opportunity to live in Bixby Hill's 24 hr gated community. An entertainers paradise with your own oversized pool w/ beautiful waterfall.
|
|
|
17141 Harvest Ave.,
Cerritos 90703
5 Beds | 3 Baths | 2,739 SqFt | $1,275,000
Welcome Home! Located in the highly sought-after area of Cerritos, this impeccable two-story home occupies is move-in ready
|
|
|
5763 Eckleson St.,
Lakewood 90713
3 Beds | 2 Baths | 1,694 SqFt | $831,000
Beautifully updated 3 bedroom, 2 bath home in the heart of Lakewood on a tree lined street only minutes from great parks, schools, and nearby freeways.
|
|
|