California Housing Market Update: July 2024
Anya’s Market Bites:
Overview: California's housing market shows signs of recovery despite challenges from last year's interest rate surge. Recent macroeconomic data indicates a positive trend with reduced mortgage rates and increased housing supply, fostering renewed buyer confidence.
Key Points:
Interest Rates and Market Impact: Interest rates have been declining, encouraging demand. The Federal Reserve's potential rate cut in September 2024 and improving Treasury rates signal optimism in the bond market, hinting at a possible economic "soft landing."
Home Sales: June saw a slight dip in home sales due to interest rate volatility. However, a recent uptick in pending sales suggests a potential rebound in July as inflation eases and rates stabilize.
Housing Supply: The supply of homes for sale has increased significantly, with active listings up 36% year-over-year. New listings have risen consistently, suggesting a healthier market balance.
Construction Trends: June reported a 3% increase in housing starts, driven by a 22% surge in multifamily developments. This increase benefits renters, although single-family home construction remains sluggish due to high mortgage rates.
Labor Market: California's labor market added 22,500 nonfarm jobs in June, showing robust growth. However, job creation has slowed in some sectors, and the unemployment rate remains above 5%.
Conclusion: The California housing market is gradually recovering, aided by declining interest rates and increased supply. Continued monitoring of economic indicators and flexible strategies will be essential for navigating the evolving landscape.
(Source: California Association of Realtors)
All the best,
Anya Derebenskiy
(949) 942-5183
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