As mortgage rates continued to rise over the last month, home sales activity dropped in March, according to a recent report from the California Association of Realtors.
Despite the challenge of higher rates and lower sales numbers, Realtors remain upbeat, according to the California Association of Realtors, believing the market will continue to improve later in the season.
As housing supply numbers have improved and the market has become more competitive, said the report, there are encouraging signs that the market could see better days in the second half of the year when mortgage rates begin to come down.
California housing market sales fell on a year-over-year basis for the first time in three months after registering back-to-back increases in January and February, said the report. Sales of existing single-family homes in California totaled 267,470 on a seasonally adjusted annualized rate in March 2024, down 7.8% from 290,020 in February and down 4.4% from 279,700 in March 2023.
The statewide pending sales year-over-year growth climbed back into positive territory in March, however, with open-escrow sales up 1.1% from the same month of last year. Mortgage rates could stay higher for longer in the short term, as rates stay high, the report also pointed out. As such, “sales activity will likely stall in April but could pick back up after the market digests the latest set of inflation news,” said the report.
Meanwhile, the statewide median price recorded another strong year-over-year gain in March, as California’s median home price rose 6.0% to $854,490 from February, and up 7.7% from an upwardly revised $793,260 in March 2023.
Though small, the year-over-year gain was the ninth straight month of annual price increases for the Golden State, the report acknowledged, as well as the eleventh time in the last 12 months that the median price for an existing single-family home beat the $800,000 benchmark.
With home sales holding up better in the high-end markets than their more affordable counterparts in the last few months, the change in the mix of sales has been playing a supportive role for the increase in the statewide median price. With seasonal factors and tight inventory expected to continue to put upward pressure on prices, California’s median price should climb further in the next couple of months.
At the same time, the National Association of Realtors this week released a summary of existing-home sales data showing that housing market activity declined 4.3% this March from February 2024. March’s existing-home sales reached a 4.19 million seasonally adjusted annual rate, down 3.7% from March 2023.
Yet, the latest Realtors’ Confidence Index suggests that the housing market will slowly continue to improve from last year.
According to the March survey, at least 26% of those surveyed expected a year-over-year increase in buyer traffic in the next three months, a dip from 30% in February but a jump from 21% in March 2023. The same number of respondents also expected a year-over-year growth in seller traffic for the same time frame, unchanged from February but more than doubled from 12% recorded 12 months ago, according to the survey.
Sixty percent of respondents said homes listed on the market were sold in less than a month, which is an improvement from the 56% recorded a month ago, but still a decline from 65% in March 2023. On average, said the respondents, listings received 3.1 offers in March, as compared to 2.7 offers in the prior month and 3.2 offers in the prior year.
