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Although recently released data points to rising macroeconomic uncertainty that is beginning to spill over into the housing market, prospective homebuyers are beginning to enjoy some of the benefits of a shifting market. To be sure, rising rates have reduced buyer purchasing power, but rising inventories and reduced competitiveness means that buyers who remain in the market have a better shot at having their offer accepted than at any point since the pandemic began.
Inventory Now Exceeds Pre-Pandemic Levels: After more than two years of consistent year-over-year declines in the number of active listings available for sale, the inventory shortage has shown consistent signs of improving in recent weeks. Last week, there were more active listings on the market than at any time in the past two years. Nearly 48,000 were on the market last week, which edges out the week of May 23, 2020 as the highest level of active listings since we began reporting weekly MLS statistics at the beginning of 2020. It is important to note that listings still remain depressed by historical standards, but it is encouraging to see them trend upward on a more consistent basis this year.
Rising Inventory Helping Homebuyers: As the number of homes to choose from rises, homebuyers are finding the market less frenzied than at any point since the pandemic began. Last week, the percentage of homes that sold over list price dipped to 46% of closings. That is only the second week since September 2020 where fewer than half of homes sold above list price. In addition, more sellers are willing to reduce their price, with 37% of active listings down from original list price last week—also a 2+ year high. Taken together with a recent reduction in rates, buyers currently in the market should be encouraged by rising prospects of finding a home and having their offer accepted.
Mortgage Rates Begin to Rise Again: After two consecutive declines in the weekly rate posted by Freddie Mac, the average 30-year fixed-rate mortgage rose last week. At 5.51%, rates are still lower than they were last month, but that represents a 20 basis-point increase from the week prior. Given the expectation of a rate increase in the 75-100 basis-point range at the upcoming Federal Reserve meeting, it is likely that mortgage rates will continue their upward trend as inflationary pressures remain and demand for short-term bonds wane.
Declining Mortgage Applications Accelerate: The number of prospective homebuyers applying for residential purchase loans dropped 18% last week compared to the same week 1 year earlier. This marks the 60thconsecutive week of year-to-year declines in mortgage applications that began after the peak homebuying season last summer. Through the first two weeks of July, mortgage applications are at their lowest level of any July going back to 2014. This suggests that recent reading on pending sales in California, which suggested further moderation in home sales in July and August, should be given credence.
Home Sales Dip to 12-Year Low: Existing, single-family detached home sales in California was down 8.4% on a monthly basis from 376,560 in May and down 20.9% from a year ago, when 436,020 homes were sold on an annualized basis. Outside of the initial lockdown in the Spring of 2020, this is the lowest level of home sales since 2008. California’s median home price declined 4.0% in June to $863,790 from the revised record-high of $900,170 recorded in May. The June price was 5.4% higher than the $819,630 recorded last June. The moderation in the median home price was due partly to a change in the mix of sales in June, as the high-end market started pulling back.
Rising Prices Begin to Weigh Consumers Down: The latest reading on inflation showed the issue getting worse rather than coming in for a soft landing. The consumer price index (CPI) rose 9.1% on a year-over-year basis in June, which was another 40-year high and suggests that recent hopes that the Fed may ease off their aggressive schedule of rate hikes may be misplaced. Outside of motivating the Fed, rising prices are also expected to begin eating into overall economic growth as, despite a nominal increase in retail sales, real spending has declines in 3 of the last 4 months.
If you're ready 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.
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700 E Ocean Blvd. #607
Long Beach 90802
1 Bed | 2 Bath | 880 SqFt | $625,000
Amazing ocean views from every room in this spacious, bright, beautifully updated modern open floor plan high-rise condo.
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3595 Santa Fe Ave. #21
Long Beach 90810
2 Beds | 2 Bath | 1,506 SqFt | $450,000
Why rent when you can own! Great opportunity to own this 2 bedroom 2 bath home in a gated community! Coming Soon!
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853 E. Helmick St
Carson 90746
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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819 Atlantic Ave. #1
Long Beach 90813
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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942 N. Loma Vista Dr.
Long Beach 90813
2 Beds | 1 Bath | 1,158 SqFt | $785,000
Beautifully updated Craftsman home located in the Historic Willmore District overlooking Drake Park on a huge 8,536 sf lot.
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4271 Petaluma Ave.
Lakewood 90713
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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1210 E 11th St.
Long Beach 90813
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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421 N. Bellflower Blvd #221
Long Beach 90814
2 Beds | 2 Baths | 1,271 SqFt | $610,000
Live the beach life at this lovely resort style condo!!! Large 1,271sf, 2 bedroom, 2 bath end unit condo with a bonus room/den located near CSULB.
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1329 E 1st St. #16
Long Beach 90802
2 Beds | 2 Baths | 959 SqFt | $476,000
Great location just 2 blocks from the beach in Long Beach. This condo is on the first floor, faces towards the ocean, and the floor to ceiling windows fill the home with wonderful natural sunlight.
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1187 E 3rd St #111
Long Beach 90802
2 Beds | 2 Baths | 1,039 SqFt | $477,000
Close to the East Village Arts District, transportation, trendy restaurants, and just 3 blocks away from the beach.
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100 W 5th St #3C
Long Beach 90802
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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