Southern California Homebuyers Face Challenges Amid Rising Rates and High Prices

Southern California Homebuyers Face Challenges as Sales Hit 36-Year Low

Homebuyers in Southern California are facing tough times as rising mortgage rates and high home prices are limiting their buying power. According to new CoreLogic figures, sales in August fell to the lowest level for that month in at least 36 years.

The median price of a Southern California home dipped to $735,000 in August, down slightly from the previous month but still up 2% from a year earlier. However, the number of homes sold in August remained severely depressed, with just 15,659 transactions, down 16.3% from the previous year.

The high prices and higher mortgage rates have made it difficult for many buyers to afford a home, with the typical house payment hitting an all-time high of $3,939 per month. This has led to a decrease in buying power for many shoppers, forcing them to lower their sights or borrow cash from relatives to make a purchase.

Despite the challenges, bidding wars are still common in the market, although not as prevalent as they were in 2021 when mortgage rates were lower. The limited inventory of homes for sale has also contributed to the competitive market, with fewer homes available for buyers to choose from.

Overall, it remains a seller’s market in Southern California, with prices propped up by a steady stream of buyers. However, the middle class is feeling the squeeze, as it becomes increasingly difficult to afford a home in the current market conditions.

With mortgage rates on the rise and inventory levels low, the housing market in Southern California is facing significant challenges. While some counties saw small annual price gains in August, others experienced declines in both prices and sales.

Despite the obstacles, real estate experts remain optimistic about the market, noting that there are still buyers in the market willing to pay top dollar for the right property. However, the current conditions are making it increasingly difficult for many Southern Californians to achieve their dream of homeownership.