Climbing Mortgage Rates Hurt Existing Home Sales
High prices and rising mortgage rates took a heavy toll on California’s already sluggish housing market, as sales of existing homes statewide fell 8.8% in March from the previous month, a realtors group reported Wednesday.
“Home sales have been dampened due to affordability constraints,” said Chris Taylor, manager of economic and market analysis for the California Assn. of Realtors, which issued the report. Fewer sales of expensive homes in California metropolitan areas also helped dent sales, Taylor added.
Sanford R. Goodkin, a San Diego real estate consultant, said sales also fell because “interest rates edged up.” The average fixed-rate mortgage on existing homes sold in March rose to 10.39% from 10.30% in February, according to the Federal Housing Finance Board.
Sales fared somewhat better nationwide. The National Assn. of Realtors said in its monthly report that sales of single-family homes totaled 3.40 million in March at a seasonally adjusted annual rate, unchanged from February’s revised resale rate.
Across California, 511,298 existing single-family detached homes were sold last month on an annualized basis, down from an annualized rate of 560,663 in February. Last month’s figure was 18.1% lower than the 624,168 sold in March, 1989.
The annualized rate, adjusted to account for seasonal factors affecting home sales, gauges what would be the total number of homes sold for all of 1990 if the pace in March continues.
Sales in the Los Angeles and Orange County regions rose 15.6% and 24.9%, respectively, from February’s levels, but those figures weren’t adjusted to account for the normal seasonal pick up in sales between February and March. When compared to March, 1989, sales in the Los Angeles and Orange County regions dropped 31.2% and 28.7%, respectively.
The median price of an existing single-family home in California dipped 0.3% to $196,621 in March from $197,184 in February, but rose 1% from the revised $194,697 reported in the year-ago month. The median price means that half the homes sold for a higher price, while half sold for less.
In the Los Angeles region, the median price of a single family home crept up 0.2% to $210,458 in March from $210,123 in February. In the Orange County region, the median price rose 1.1% to $246,002 in March from $243,285 in February.
SLOWING HOME SALES Figures are based on closed escrow sales of single-family detached homes. Month-to-month changes may overstate actual changes because of the small size of individual regional samples. Regional figures are not seasonally adjusted.
PERCENT CHANGE IN SALES ACTIVITY MEDIAN PRICE FROM FROM REGION MARCH, 1990 FEB., 1990 MAR., 1989 CALIFORNIA (single family) $196,621 -8.8% -18.1% CALIFORNIA (condo) 141,132 +54.4 0.0 Central Valley 111,012 +41.0 +10.8 High Desert 103,600 0.0 +1.8 Los Angeles 210,458 +15.6 -31.2 N. California 248,403 +50.6 -16.7 Wine Country 176,307 +8.9 -24.6 Orange County 246,002 +24.9 -28.7 Palm Springs/Lower Desert 115,184 +32.3 +4.2 Riverside/ 130,537 + 39.2 -8.0 Sacramento/San Bernardino 129,932 +50.2 +20.5 San Diego 184,418 +32.5 +1.2 San Francisco Bay 262,451 +38.2 -28.8 Santa Barbara 227,777 +22.2 -14.6 Santa Clara 275,504 -20.5 -32.3 Ventura 240,651 -28.7 -39.9
Source: California Assn. of Realtors
