Home Sales Dip as Interest Rates Move Up Slightly
An uptick in mortgage rates kept the San Diego resale housing market in the doldrums during February, according to figures released Wednesday by the San Diego Assn. of Realtors.
The countywide average price for a resold single-family house was $226,674, down slightly from the $226,886 average in February, 1991. Sales activity was also off as February unit sales handled by San Diego Assn. of Realtors members totaled 697 deals, off 7% from the 756 unit sales made during the same month last year.
Fixed-rate mortgages rose by the end of February to an average 9% from late January’s average level of about 8%, said Jim Witherow, managing director of mortgage banking at HomeFed Bank.
Until the mortgage rates rose, the market was showing weak but unmistakable signs of a revival, said Al Hitchens, a broker at Red Carpet-Dave Chambless & Associates Realtors in the Mira Mesa area, a prime market for entry-level buyers.
“It’s almost as if lenders hate the thought of the market taking off,” Hitchens said, who added that mortgage rates in recent days have been quoted as high as 9.25%
Although mortgage rates are up a full percentage point over the last six weeks, they are still lower than in past years. Nevertheless, the San Diego housing market remains dormant, despite the fact that housing prices have remained virtually stable for three years.
To illustrate the flatness of the market, Hitchens said the average price of an “entry level” house in the Mira Mesa area has dropped $10,000 over the last two years. A three-bedroom, two-bath house with a 1,150-square foot floor plan that cost $169,000 in 1990 is likely to sell now for $159,000 or less, he said.
Despite recent upward pressure, Witherow said HomeFed does not project that rates will spiral up in 1992. HomeFed sees fixed-rate mortgages hovering around 9% the rest of the year, give or take half a percentage point.
Witherow said higher mortgage rates have caused refinancing loan applications to drop off significantly, but that home purchase loan applications are still improved over the February, 1991, level.
