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The labor market continues to shrug off various headwinds and record solid gains. Fears of recession have faded somewhat, although the tight labor market may also keep inflation stubbornly high and prevent the Fed from taking their foot off the gas on interest rates. In addition, the Treasury market suggests that there will be little relief for interest rates over the short-run as 2- and 10-year yields continue their upward trend. Mortgage rates have topped 7% again after a modest reprieve during April and May. Mortgage applications reflect these headwinds, but much like home sales, home purchase sentiment remains above the lows hit late last year and California is expected to see closed transactions remain solid in the June and July data.
Job growth remains healthy, but may suggests persistent inflation: Despite ongoing pessimism, the U.S. economy continues to produce net gains in employment at relatively strong levels. June’s employment report showed a 209,000 increase in nonfarm payrolls while the household survey showed a decline in unemployment to 3.6% despite 133,000 net new entrants to the workforce last month. Many of the gains were in Healthcare, but Manufacturing, Construction, Tourism, and Government also saw an increase. The reduction in employment at Temporary Help Service firms could suggest slower growth ahead, but all signs point to a labor market that is, thus far, resisting the headwinds.
Rates top 7% again as Treasury prices fall, but spread absorbing some: The weekly Freddie Mac estimates for the average 30-year fixed rate mortgage rose to 6.81% last week as the 10-year Treasury saw yields rise above 4%. In addition, the daily rates show the average 30-year interest rate climbing to 7.14%, which is nearing its highest level it has reached since the Fed began raising interest rates last year. The bond market suggests Treasuries may continue to rise, so mortgage rates may be higher in the coming months. Fortunately, mortgage rate spreads above Treasury rates, which have been running abnormally high, have absorbed some of the recent increase –dropping from 313 bps in May to 286 last week. Normal spreads are in the 200 bps range, so falling bond prices won’t translate 1:1 into higher mortgage rates.
Home purchase sentiment holding steady in June: Despite relatively weak mortgage applications compared with other “Junes,” Fannie Mae’s monthly survey of Home Purchase Sentiment showed that homebuyers remain resilient in the face of higher rates and tight inventory. The overall index rose 0.4 points, but homebuyers are not particularly optimistic. More than 50% of respondents last month thought it was a “bad time to buy” a home, citing high prices and limited supply. However, the percentage of buyers expecting prices to fall has dipped, so motivation may increase as the prospect of higher interest rates and higher prices become more apparent.
Mortgage applications rose heading into holiday weekend: The mortgage purchase applications index rose for the week ending June 30th. And although applications remain down compared with the same week of the previous year, the pace of decline has slowed from a 46% last November to 22% last week. However, new mortgage applications follow a predictable seasonal pattern and have likely peaked for the year meaning that, although home sales have rebounded from the bottom hit last winter, demand is not expected to gain momentum in the fall. In fact, for the month as a whole, June applications were at a lower level than other Junes going back to 1995.
If you have any real estate questions or would like to discuss if now is a good time to buy or sell, please feel free to contact me.
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781 W 30th St
San Pedro 90731
3 Bed | 2 Bath | 2,067 SF | $1,200,000
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. Situated on a generous 9,576 SF lot, there's plenty of space to potentially add an ADU.
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525 E Seaside Way #402
Long Beach 90802
1 Bed | 1 Bath | 622 SF | $2,650
Beautiful luxury high-rise condo at Harbor Place Tower in the heart of downtown Long Beach. Walking distance to the beach, Aquarium, convention center, the Pike, Pine Ave restaurants, nightlife and so much more!
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773 W 30th St
San Pedro 90731
3 Bed | 2 Bath | 1,040 SF | $875,000
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. The spacious 8,904 SF lot provides ample room for expansion, including the possible potential to add an ADU.
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1007 Catalina Ave #108
Redondo Beach 90277
2 Bed | 2 Bath | 1,181 SF | $1,200,000
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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985 S. Idaho Ave. #60
La Habra 90631
2 Bed+Den | 2 Bath | 1,073 SF | $489,000
This 2 bedroom plus a den (currently being used as a 3rd bedroom) is tucked away in a peaceful serene location surrounded by beautiful trees in the Woodlake Villas of La Habra.
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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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7887 Lampson Ave #54
Garden Grove 92841
2 Bed | 2 Bath | 800 SF | $103,259
Beautifully updated 2 bedroom, 2 bath home in Garden Terrace Estates.
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5528 Pearce Ave.
Lakewood 90712
3 Bed | 2 Bath | 1,592 SF | $845,000
The "Honey Due" list has already been done for you; all you have to do is move in and start enjoying this 3-bedroom 2 bath Lakewood home. Open concept kitchen with newer cabinets, stainless steel appliances and granite countertops.
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256 Hermosa Ave
Long Beach 90802
2 Bed | 1 Bath | 780 SF | $475,000
Nicely updated 2 bedroom condo in Alamitos Beach, close to Bluff Park, and just a short walk to the beach, Bixby Park, cafes, nightlife, and great restaurants.
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199 Prospect Ave
Long Beach 90803
5 Bed | 3 Bath | 2,557 SF | $1,878,000
Stunning 4 bedroom, 2 bathroom Belmont Heights Tudor with a nicely-sized Guest Quarters/Rental Unit/Home Office above the 2-car garage!
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200 S. La Fayette Park Pl. #1
Los Angeles 90057
1 Bed | 2 Bath | 1,990 SF | $775,000
Great corner unit 1 bedroom, plus den and loft townhome located close to Korea town, DTLA, and Silverlake.
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100 W. Louise St.
Long Beach 90805
3 Bed | 2 Bath | 1,031 SF | $545,000
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.
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5221 E Patterson St.,
Long Beach 90815
4 Bed | 2 Bath | 1,627 SF | $870,000
Wonderful home in the Stratford Square area of Long Beach. Lovely neighborhood known for its award winning schools.
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939 Appletone Ave #3
Long Beach 90802
1 Bed | 1 Bath | 640 SF | $355,000
Nicely updated top floor end unit 1 bedroom 1 bath condo in the heart of Alamitos Beach just a short walk to the beach.
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939 Appleton Ave #8
Long Beach 90802
2 Bed | 2 Bath | 900 SF | $453,000
Charming two bedroom two bathroom condo sits in a prime location, just blocks away from the popular Alamitos Beach, Shoreline Village, Pike Outlets, 4th Street's Retro Row, Downtown Long Beach, and more.
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64 Corona Ave.,
Long Beach 90803
3 Bed | 3 Bath | 1,532 SF | $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!
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2204 Conquista Ave.,
Long Beach 90815
4 Bed | 3 Bath | 2,629 SF | $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.
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