California Real Estate Market Update: Mortgage Rates Drop and Supply Increases
Mortgage Rates Show Significant Improvement
The latest macroeconomic data has provided a boost to California’s housing market, which continues to recover from last year’s surge in interest rates. While home sales saw a modest decline in June due to rate fluctuations in April and May, recent trends suggest a positive shift. Pending sales indicate that the recent drop in mortgage rates has started to rekindle buyer interest. Fortunately, this rate reduction is happening alongside an increase in housing supply, driven by more resale inventory and a rebound in new construction. After last week’s favorable inflation report, both homebuyers and homebuilders are slowly regaining their confidence.
Interest Rates Continue Downward Trend
Interest rates have been steadily improving, with the Federal Reserve set to meet at the end of July. Although most predictions point to the first rate cut happening in September 2024 rather than the upcoming meeting, there are positive signs. Treasury rates have improved as inflation dipped below 3% year-over-year in June for the first time since the pandemic-driven price increases began. Both the 10-year and 2-year bonds hit their lowest levels since February, suggesting increased optimism in the bond market about the Fed achieving a ‘soft landing.’ Interest rates are expected to continue their downward trend, even if the Fed holds off on immediate cuts in July, though ongoing volatility remains likely.
Home Sales Slip in June but Potential for July Rebound
California home sales dipped slightly in June due to volatile interest rates at the end of Q2. Sales of existing single-family homes at the state level decreased to 270,200, a 0.8% decline from May and a 2.7% drop from June 2023. Year-to-date sales have also fallen behind last year’s levels by 0.5%. Despite the rate fluctuations in June, recent data shows an 8% year-over-year increase in average pending sales per transaction day, indicating a potential improvement in the coming weeks. With inflation easing but still above the Fed’s target, the central bank is expected to cut rates later this year, though at a more moderate pace. This should gradually boost home sales in the second half of the year.
Housing Supply on the Rise
California’s unsold inventory index (UII) increased in June from both the previous month and June last year, with active listings up 36% year-over-year. Newly listed properties have increased for the sixth consecutive month, showing solid growth. Average new active listings per business day continued to rise by double digits for the fourth straight month since February. With economic reports suggesting sustainable inflation cooling, mortgage rates could moderate further, leading to more improvements in housing supply before the end of the home buying season.
Stay tuned for more updates, and feel free to reach out with any questions or for personalized advice on the current market conditions. Your success in real estate is our top priority.
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2101 E 2nd St #205
Long Beach 90803
2 Bed | 2 Bath | 1064 SF | $689,900
Enjoy the ocean breeze in this beautiful 2 bedroom 2 bath condo located just 2 blocks to the beach and across from Bixby Park. Walking distance to the beach, Retro Row, Broadway Ave, dog park, Farmer’s Market, and all the great local restaurants, cafes, nightlife, pubs, bakeries, and more.
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1168 E 10th St #224B
Long Beach 90813
2 Bed | 2 Bath | 698 SF | $399,900
Great opportunity to own this nicely updated 2 bedroom, 2 bath, top floor corner condo with views of Signal Hill. Just a short drive to downtown Long Beach and to the beach!
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525 E Seaside Way #1508
Long Beach 90802
2 Bed | 2 Bath | 1030 SF | $790,000
Enjoy breathtaking ocean views from the living room, bedrooms and the patio in this modern luxury 2 bed, 2 bath highrise condo. Short distance to the beach, harbor, Shoreline Village, Terrace Theater, restaurants, nightlife, and so much more!
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3022 Bostonian Dr.
Rossmoor 90720
4 Bed | 3 Bath | 2,612 SF | $1,700,000
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6544 Cerritos Ave.
Long Beach 90805
2 Bed | 1 Bath | 1,198 SF | $670,000
Welcome to 6544 Cerritos Ave, a charming slice of Spanish-inspired architecture nestled in the heart of North Long Beach. This classic 2-bedroom, 1-bathroom home boasts timeless elegance coupled with modern upgrades, offering comfort and style.
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700 E Ocean Blvd #607
Long Beach 90802
1 Bed | 1.5 Bath | 880 SF | $625,000
Amazing ocean views in this beautifully remodeled open floor plan condo at the iconic International Tower! This beautifully updated modern high-rise condo features hardwood flooring, fresh interior paint, scraped ceilings, and is light and bright with expansive ocean views.
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1985 San Francisco Ave.
Long Beach 90806
3 Bed | 2 Bath | 1,509 SF | $1,020,000
This historic gem awaits you in the charming Wrigley neighborhood of Long Beach! This gorgeous Spanish home, built in 1928, is full of charming curb appeal with its gated courtyard, porte cochere, red-tiled roof and front steps leading to the turret entry!
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16136 Cornuta Ave. #117
Bellflower 90706
3 Bed | 2.5 Bath | 1336 SF | $590,000
Beautifully remodeled townhome with newly updated kitchen, baths, flooring, lighting, etc. Private 2 car attached garage.
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14715 Bellflower Blvd.
Bellflower 90706
2 Bed | 1 Bath | 805 SF | $655,000
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8230 Santa InezBuena Park 90602
4 Bed | 2 Bath | 1,194 SF | $625,000
Beautifully remodeled end unit townhouse in Buena Park! 4 bedrooms, 2 baths with open floor plan, modern kitchen, and private backyard.
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3825 Linden Ave.
Long Beach 90807
3 Bed | 2 Bath | 2,142 SF | $1,350,000
Charming 1933 Spanish Stucco with many original features. This single story home is situated on one of the prettiest streets, and just a short distance to both Atlantic Avenue and Long Beach Blvd.
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2512 W Beachy Pl
Anaheim 92804
3 Bed | 2 Bath | 1,695 SF | $875,000
Embrace the charm of this lovingly maintained single-story home, cherished by the same family for over 50 years. Nestled on an expansive 10,948 sq ft lot, this property beckons with endless possibilities – from adding an ADU, a pool, more living space, or just simply reveling in the serene, park-like ambiance.
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2174 Stanbridge Ave
Long Beach 90815
3 Bed | 2 Bath | 1,489 SF | $905,000
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807 Delaware St
Huntington Beach 92648
4 Bed | 5 Bath | 3,237 SF | $2,605,000
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.
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