March Sales of Homes Increase 32% Despite Mortgage Rate Hikes

Despite rising mortgage rates, March sales of existing houses in the San Fernando Valley jumped 32% from the previous month, the San Fernando Valley Board of Realtors reported Monday.

The gain partly reflected the typical upswing in sales activity that arrives in the spring. But March sales of 1,192 single-family houses also inched upward from the 1,186 sales of a year earlier and reversed a 15% month-to-month decline that occurred in February, when 902 units were sold.

Board President Buddy Bernard said the sales figures, in spite of recent increases in mortgage interest rates, show the “market remains strong and buyers plentiful.”

But he cautioned that March “is traditionally the kickoff of the peak home-buying season,” and that “we have come to expect a sharp rise in activity from February to March each year.”

Condominium sales also rebounded from a February decline by surging 45% in March, to 439 from 302 the previous month. March sales also were up 36% from the 322 units sold a year earlier, the board said.

House prices also continued to climb, albeit modestly. The average resale price of a single-family house sold during March was $276,600, up 2.3% from the $270,400 average in February and a 26.5% gain from $218,700 a year ago.

The average resale price of a condominium was $134,900, tying a record high set in December. The average was up 2% from $132,700 in February and up 16% from the $116,800 average in March, 1988, the board said.

The housing industry is watching sales figures closely to see whether the recent rise in interest rates will dampen sales. Mortgage rates, like most lending charges, have climbed in recent months in response to credit-tightening moves by the Federal Reserve Board as part of the central bank’s effort to limit inflation.

For example, rates on fixed-rate, 30-year conventional mortgages at local savings and loan associations this week were between 11% and 12%. Six months ago, the range was 10% to 11%. Likewise, the initial rate on adjustable-rate mortgages has climbed to 8.5% to 10% from 7% to 8.25% six months ago.

The Valley realty board, California’s largest, reports sales of houses and condominiums by its members in the area from North Hollywood to Agoura. Its statistics do not include most new residences, which generally are not sold by real estate agents or sales by homeowners who do not employ agents.

MARCH VALLEY HOUSE SALES

NORTH WEST Avg. Price: $279,500 Sales: 61

NORTH CENTRAL Avg. Price: $287,100 Sales: 170

NORTH EAST Avg. Price: $164,00 Sales: 218

SOUTH WEST Avg. Price: $326,800 Sales: 270

SOUTH CENTRAL Avg. Price: $289,800 Sales: 185

SOUTH EAST Avg. Price: $299,300 Sales: 288