Southern California Homebuying Slows in March as Prices Hit Record Highs: CoreLogic Data
Southern California Homebuying Slows as Prices Reach Record Highs
The Southern California housing market saw a significant slowdown in March, with rising mortgage rates and record-high prices deterring potential buyers. According to data released by CoreLogic, the region had 14,176 completed sales of existing and new homes in March, making it the second-slowest March since 1988. This sluggish pace was 39% below the average, indicating a significant drop in homebuying activity.
Despite the lackluster sales numbers, the median sales price in Southern California reached a new peak of $753,000, marking an 8% increase from the previous year. This surge in prices was driven by a combination of factors, including pricier financing and stubbornly high prices. Affordability levels plummeted even further, pushing many potential buyers out of the market.
The increase in mortgage rates caught many analysts off guard, as rates averaged 6.82% in March, up from 6.64% in January and 6.54% a year ago. This unexpected uptick in rates added to the financial burden for buyers, with the typical monthly house payment reaching $3,935 – the fifth-highest on record.
Homebuilders also experienced slow sales, with only 1,186 new homes purchased across Southern California in March. This accounted for just 8.4% of all March sales, the smallest share for local builders since last August.
The limited inventory of homes for sale further exacerbated the situation, with only 21,100 residences listed in March. This was up only 9% from the previous year and far below pre-pandemic levels. The lack of available homes, combined with high prices and mortgage rates, created a challenging environment for buyers.
Despite the obstacles, some counties in Southern California saw an increase in sales activity. Los Angeles, Riverside, San Diego, Orange, San Bernardino, and Ventura counties all experienced varying levels of sales growth in March. However, the overall trend of slowing homebuying activity and rising prices painted a grim picture for the region’s housing market.
As the housing market continues to face challenges, industry experts are closely monitoring the situation to see how it will evolve in the coming months. With affordability levels at an all-time low and limited inventory available, the Southern California housing market remains a tough environment for buyers looking to enter the market.