...
By Giulia Carbonaro
Senior Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
California home prices reached a new all-time high in April, according to a new report from the California Association of Realtors (CAR), with the statewide median home price exceeding $900,000 for the first time ever.
The median home price in the Golden State was $904,210, up 5.8 percent compared to a month before and up 11.4 percent from the price of $811,510 recorded a year earlier.
Read more: How to Get a Mortgage
Read More on News
It was the 10th straight month of price increases in the Golden State, the association reported, where homes remain much more expensive than they are at the national level. According to Redfin, the median U.S. home price was $433,558 last month, up 6.2 percent from April 2023.
A tight supply of homes in the national and state market—due to a historic lack of inventory and homeowners holding on to their low-mortgage properties—is likely the biggest factor driving prices up, despite stubbornly high mortgage rates. As of May 16, the average 30-year, fixed-rate mortgage was 7.02 percent, according to the Federal National Mortgage Association, commonly known as Fannie Mae.
...
"Home prices in California have been rising and reached a new record high because of tight supply conditions in the housing market," Oscar Wei, deputy chief economist at CAR, told Newsweek.
"While the market has been adding more new listings to the market in the past few months, the lock-in effect as a result of higher mortgage rates continued to hold back potential home sellers who would have put their properties up on the market if rates were lower," Wei added.
"More high-priced properties being sold in the market also moved the statewide median price higher. High-priced properties are typically purchased by buyers with higher income and they are likely less sensitive to rate increases than lower-income households."
All major regions in California except one reported a year-over-year increase in their median price last month, according to the CAR's report. In the San Francisco Bay Area, average home prices jumped by 15.5 percent from April 2023.
Read more: First-Time Homebuyer Guide
Southern California saw the second-biggest increase, with median prices growing by 12.1 percent. In the Central Valley, average home prices jumped by 6.6 percent; in the Central Coast they increased by 5.6 percent. The Far North was the only major region to report a drop in median home prices of 5.2 percent compared to a year earlier, with six of its seven counties seeing falling prices.
Despite higher prices, California experienced a hot spring homebuying season this year, with statewide home sales up 1.6 percent from April 2023. Existing single-family home sales totaled 275,540 last month, based on seasonally adjusted data, up 3 percent from 267,470 in March and up 4.4 percent from 263,960 in April 2023.
Read more: How to Sell Your Home
"April's rebound in both home sales and price shows the resilience of California's housing market and is a signal that buyers and sellers are beginning to adjust to the higher interest rate environment," said CAR president Melanie Barker, a Yosemite realtor, in a press release.
"Market fundamentals are showing signs of improvement, and competition is on the rise again; homes are selling faster and nearly half the share of homes is selling above asking price―the highest in nine months," she added.
Though home sales increased month on month in April, they remained below the 300,000 mark for the 19th consecutive month, according to the CAR's report.
"While the market performed solidly in April, we don't expect to see a rapid recovery as long as inflation remains sticky and mortgage rates continue to fluctuate despite recent dips," said CAR senior vice president and chief economist Jordan Levine.
"However, housing inventory has also started to increase, which will provide much-needed supply to the market and facilitate a higher level of home sales in the second half of the year."
According to Wei, home prices could continue climbing in California in the coming months. "Based on historical data going back to 1979, California median price typically increases 1.2 percent from April to May, 0.9 percent from May to June, 0.4 percent from June to July, and 1.2 percent from July to August. As such, the statewide median price could potentially inch up and set more new records in the next few months," he said.
Update 5/31/24, 4:30 a.m. ET: This article was updated with a comment from Oscar Wei.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines