Housing Market Update: The Cost of Buying a Home Hits New Record As Mortgage Rates Jump, Prices Rise 5%

Table Of Content

• Abcarian: Criminalizing homelessness is unconscionable, but is it unconstutitional?
• Will the Housing Market Crash in 2024?
• California’s uncertain future with zero-emission vehicle mandate fast approaching
• Protests, lawsuits and a dead rat: A wealthy California city’s epic fight to block growth
• Homeless encampments are on the ballot in Arizona. Could California, other states follow?
• Home sellers are cutting list prices as more buyers take pause: ‘The market is not the same’

Some 28% of homes sold last month were purchased entirely with cash, down from 33% in February, but up from 27% a year ago, the NAR said. “The 30-year-fixed mortgage rate could rise for few months to maybe even 7.5% before settling back down to 6.5% by the end of the year,” Yun said. In January, NAR forecast the average rate would drop to 6.1% by year’s end. Mortgage rates have mostly drifted higher in recent weeks as stronger-than-expected reports on employment and inflation stoked doubt among bond investors over how soon the Federal Reserve will move to lower its benchmark interest rate. At the end of last month, there were 1.11 million unsold homes on the market, a 4.7% increase from February and up 14.4% from a year earlier, the NAR said. That’s still well short of the 1.7 million homes on the market in March 2019, before the pandemic.

Abcarian: Criminalizing homelessness is unconscionable, but is it unconstutitional?

The Council on Criminal Justice, a nonpartisan research organization, tracked shoplifting trends in 24 cities from 2019 to the middle of 2023 and found that rates were down in more than two-thirds of the cities. Were the two biggest exceptions, logging increases of 64% and 61%, respectively. David Chiu said he hopes the high court “strikes the right balance” in allowing cities to enact reasonable restrictions without giving them a free pass to throw homeless people behind bars. He said San Francisco has already invested billions in shelter beds and other resources for homeless people, and the Supreme Court’s decision — whatever it is — won’t change its commitments.

Will the Housing Market Crash in 2024?

This will put pressure on housing prices by making mortgage payments more expensive. Higher interest rates will likely cool the frenzy of home buyers, but this is not expected to be a strong enough effect to crash a housing market. The only other thing that could really cause a crash in the Los Angeles housing market would be a wave of Coronavirus-related foreclosures. If for some reason, everyone had to sell at the same time, prices could drop. Even this would likely only put a dent in the frenzy around home buying, and I don’t see this as a likely possibility with all the government support to keep us out of another great recession. Unlike the financial crisis, most homeowners had to qualify for their mortgages based on their incomes at some point, and most have a larger equity cushion than average homeowners had before the real estate market crash during the great recession.

The Gen-Z Advantage in Housing - The New York Times

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California’s uncertain future with zero-emission vehicle mandate fast approaching

Though mortgage rates have dropped from 7%, they remain above 6% — roughly double the level that helped drive home prices to all-time highs. Last year, mortgage rates exploded, making the sky-high prices even less affordable and tanking home sales. Homes for sale in Los Angeles and Orange Counties haven’t seen this number of price reductions since late 2018 — the last time mortgage rates shot up. In the Inland Empire, price reductions are at an all-time high in a dataset that started in 2015.

Protests, lawsuits and a dead rat: A wealthy California city’s epic fight to block growth

Despite foreclosure activity trending up nationally and certain areas of the country seeing notable annual increases in REOs, experts generally don't expect to see a wave of foreclosures in 2024. A pending home sale marks the point in the home sales transaction when the buyer and seller agree on price and terms. Pending home sales are considered a leading indicator of future closed sales. “New construction continues to be an outsized share of the housing inventory,” said Dr. Lisa Sturtevant, chief economist at Bright MLS, in an emailed statement.

Homeless encampments are on the ballot in Arizona. Could California, other states follow?

One mortgage broker said he noticed a “huge drop-off” in demand as rates rose last week, while other brokers and real estate agents said they’ve seen buyers plow ahead undeterred. After a report Friday that showed inflation accelerated, more economists now expect the Federal Reserve this week will raise interest rates by more than what had been widely expected, which could send mortgage rates even higher. The explanation for the dramatic shift is simple, according to real estate experts. Mortgage interest rates have shot up in recent months, quickly making housing much more expensive. Levine said still-high mortgage rates and a slowing economy are likely to damp demand enough to keep prices from soaring. Last year, rising mortgage interest rates chilled the previously hot Southern California housing market.

Home sellers are cutting list prices as more buyers take pause: ‘The market is not the same’

The share of homes listed for sale that took recent price cuts has more than doubled since last year. County had at least one price cut, up from 7.5% during the same period last year, Redfin data show. On Covello Street in Van Nuys, the owner of a four-bedroom house recently cut the price by $50,000 to $949,900 after the 1950s tract home sat on the market for three weeks. Values could come down modestly, some experts said, if the Federal Reserve’s actions to tame inflation send mortgage interest rates significantly higher — or tip the economy into recession. Similar increases can be found in data trackers from mortgage company Black Knight and real estate brokerage Redfin.

AP AUDIO: Sluggish start for spring homebuying season as home sales fall in March with mortgage rates rising.

Build-to-rent fills an empty spot in metro Denver’s housing market - Greeley Tribune

Build-to-rent fills an empty spot in metro Denver’s housing market.

Posted: Sat, 27 Apr 2024 12:06:20 GMT [source]

Redfin said that over the 12 months that ended Dec. 3, the median sale price of a U.S. home rose 4.1% to $364,166. But because of the surge in mortgage rates, the median monthly mortgage payment rose 15%, at $2,561. The average rate on a 30-year mortgage got as low as 6.67% in mid January, but has been creeping higher, reaching 7.1% this week. When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford. A modest pullback in mortgage rates early this year helped lift home sales in January and February, but rates mostly ticked up in February and March, when many of the home sales that were finalized last month would have taken place.

Amid a high percentage of homeowners still locked in to low mortgage rates, home builders have been picking up the slack. Despite ongoing affordability hurdles, Fannie Mae forecasts an increase in home sales transactions compared to last year. Experts also anticipate a slower rise in home prices this year compared to recent years, but price fluctuations will continue to vary regionally and depend strongly on local market supply. The report’s author, Magnus Lofstrom, said that rates of reported shoplifting dropped in much of the state, including L.A. But the region saw a steady rise in the summer of 2021, he said, and by late 2022, the most recent data at the time of his report, the rate was at least 10% above the pre-pandemic level.

Experts expect buyers to have a bit more leverage this year compared to last. Data from Zillow shows that 1 in 5 home listings saw a price cut in January, and the typical home was on the market for 29 days — longer than during last year’s buying frenzy, but 19 days shorter than the average before the pandemic. “While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” NAR chief economist Lawrence Yun said in a news release Thursday. “[T]he record low supply of houses on the market protects against a market crash,” says Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, a non-QM lender.

I love a good bargain, and saving a few thousand dollars off the purchase price is excellent if it works but terrible if you lose out on the perfect home. Ok, so you are shopping in Los Angeles; I’m not sure the dream home exists unless you have several million dollars to spend. The more money you have to spend on a Los Angeles home, the more options you may have to purchase, with less competition. I should also point out that she lived in her Los Angeles home for more than 40 years, raised her six children there, and it still sold for nearly 600% more than what she paid. Time in the housing market is key to making a healthy profit and not having to worry much about short-term volatility in Los Angeles housing prices. If nothing else, if you get a 30-year fixed mortgage - and make 360 payments – you will own your home outright.

Despite the increased prevalence of price cuts, many analysts don’t predict the actual value of Southern California homes to fall soon — absent a recession. In the last two years, many sellers ignored offers unless buyers waived certain contingencies, particularly the appraisal contingency that allows a buyer to walk away if an appraisal comes in low. Still, there has been a marked shift in the environment for would-be home buyers, and other changes are afoot as price cuts become more common. Despite the slowdown, agents say that there are still many eager buyers and that the number of homes for sale remains well below pre-pandemic levels, with bidding wars still breaking out for the best properties. The change has placed some buyers in entirely new price brackets and priced others out altogether. In Southern California and the wider U.S., they make up a minority of listings, and most homes still sell for more than the list price.

Jordan Levine, chief economist with the California Assn. of Realtors, also predicts rising prices, but like Tucker at a more modest level than during the pandemic. Although the market is more competitive, it’s nothing like the pandemic housing boom. Compared with a few months ago, open houses should be busier and there’s a greater chance you’ll need to bid against others. Since the start of the year, the total number of homes for sale in Southern California has dropped 21%, according to data from Redfin. Southern California home prices are falling, eroding equity homeowners could spend on renovations or emergencies. By one measure, prices in the six-county region fell 13% from the peak last spring.