Southern California Homebuying Slows in March Amid Rising Mortgage Rates and Record Prices

The housing market in Southern California took a hit in March as a combination of rising mortgage rates and record-high prices deterred potential buyers. According to data released by CoreLogic, the region saw a total of 14,176 completed sales, marking an 8% decrease from the previous year and the second-lowest sales for a March since 1988.

Despite the sluggish sales, the median sales price in Southern California reached a new peak of $753,000, rising 1.8% in March and 8% over the past year. This increase in prices set new all-time highs in Orange, Riverside, and San Diego counties.

The slow sales momentum in March was unexpected, as this month typically sees a surge in homebuying activity. However, the combination of high prices and mortgage rates pushed many potential buyers out of the market. Homebuilders also experienced slow sales, with new home purchases remaining flat compared to the previous year.

The affordability challenges were further exacerbated by the limited housing options available for buyers, as many homeowners were hesitant to sell their properties due to concerns about affording a new residence. Additionally, the number of homes listed for sale in March was significantly lower than pre-pandemic levels.

Looking ahead, the outlook for the housing market remains uncertain as mortgage rates continue to rise, with rates averaging 7% in April. Despite some increases in sales in certain counties, the overall trend of sluggish homebuying is expected to persist in the near future.

Overall, the housing market in Southern California faces challenges due to the budget-busting mix of rising mortgage rates and record-high prices, making it difficult for many potential buyers to enter the market.