CAR: Housing affordability falls fourth straight month in a row
Rising rates, increasing home prices impact affordability
Home sales in California fell for the fourth straight month in November due to rising interest rates and a run-up in home prices, the California Association of Realtors said.
"Improving home prices are a double-edged sword for the housing market. While welcomed news for homeowners and prospective sellers, diminished affordability is squeezing out many buyers and dampening their enthusiasm for home purchasing," said C.A.R. President Kevin Brown.
"Buyers are playing the waiting game and putting their home search on hold until prices stabilize and more inventory becomes available in the market," Brown added.
Closed escrow sales of existing, single-family detached homes in the state totaled a seasonally adjusted annualized rate of 387,520 units in November.
The information was collected through C.A.R. from more than 90 local Realtors associations and MLS systems statewide.
In addition, sales in November were down 3.4% from a revised 401,000 in October and down 12% from a revised 440,250 in November 2012: the lowest since July 2010.
The statewide median price of an existing, single-family detached home decreased 1.2% from last month’s median price of $427,290 to $422,210 in November.
Furthermore, November’s price was 22.2% higher than the revised $345,560 recorded in November 2012, recording the 17th straight month of double-digit annual gains.
"Sales reached their highest level in the fourth quarter of 2012, when mortgage rates bottomed out last November. While diminishing housing affordability played a big role in the larger than expected decrease in home sales this November, exceptionally strong sales last year was another factor for the double-digit year-to-year decline," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.
"The demand for housing could remain soft in the upcoming months as buyers and sellers continue to search for a level playing field in the market," Appleton-Young added.