An end-of-year dip in mortgage rates has resulted in an upswing in California home sales, according to a recent report from the California Association of Realtors (CAR).
Similar sales numbers have not been seen since September 2022, said the report, noting that sales of existing single-family homes in California totaled 290,020 in February, up 12.8% from 257,040 in January, and up 1.3% from 286,290 recorded 12 months ago.
This is according to information collected by CAR. from more than 90 local realtor associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2024 if sales maintained the February pace throughout the year, said the report. It is adjusted to account for seasonal factors that typically influence home sales.
Meanwhile, state pending sales slipped back down by -2.6% in February after recording their first year-over-year gain since May 2021, as mortgage rates rose.
The growth pace of closed sales could begin to slow in March before picking back up later in the home buying season, due to lowering rates, CAR also reported.
The higher sales numbers for February, said CAR, reflect a positive consumer attitude since the start of the year, and the latest housing market report released by C.A.R. also reflects the improvement in optimism.
Supply and demand both increased in February, and the overall market appeared to be heating up with the approach of the spring homebuying season, as stronger inflation data has appeared in the past couple of weeks, said the report.
Rates have just begun to trend up again, however, which could create some headwinds for homebuyers in the near term, said CAR.
Housing demand should increase in the later part of the home buying season, CAR also noted, as inflation continues to ease, and rates begin to trend down again.
Adding to the optimism , active listings at the state level increased on a year-over year basis for the first time in 11 months, and the increase for February was the largest in 12 months.
“This is an encouraging sign that housing supplies could be heading in the right direction, as the market approaches the spring homebuying season,” said the report.
Newly listed for-sale properties also increased from a year ago for the second consecutive month by double digits, as more sellers entered the market.
The good news for sellers, said CAR, is that the statewide median price registered a strong year-over-year gain in February. California recorded a median home price of $806,490 last month, up 2.2% from $789,480 in January and up 9.7% from $735,300 in February 2023. The near-double-digits year-over-year gain was the eighth straight month of annual price increases for the Golden State.
It was also the tenth time in the last 11 months that the median price of an existing single-family home exceeded $800,000. The CAR report pointed out that tighter housing supply was the primary reason for the increase in home prices, but more higher-priced housing units being sold was also another factor for the strong surge in price growth in February.
