The California Housing Market is cooling down. This is the best moment for homebuyers who don’t want competition when placing their offers. In California, the housing market has begun to stabilize around the medium-term levels.
Economic Factors
- The number of continuing claims for unemployment in California dipped to an 82-week low of 461,609 last week.
- Continuing claims have been below 500,000 for the first time since March 2020. This shows that more Californians continue to get back to work as the economic recovery progresses.
- The economic recovery has decelerated caused by:
a. Inventory/supply chain constraints
b. Expiring government stimulus programs, and
c. A resurgence in coronavirus during the third quarter.
Housing Activity
- The number of properties receiving 4 or more offers has been moderating, according to results from CAR latest survey. Last week, 49% of respondents reported that their last transaction had at least 4 offers. Last May, their last transaction at 4 offers were nearly 72% this May.
Mortgage Applications & Rates
- The number of prospective homebuyers applying for new purchase applications continues to dwindle from 2020 levels. Last week represented the 23rd consecutive weekly decline. This means fewer homebuyers are in the market and there is less competition among them.
- According to Freddie Mac’s survey, the housing market suffered a third consecutive weekly increase in mortgage rates, which hit 3.14%.
- Mortgage Rates are still attractive by historical standards and the 10-year was stable last week.
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Source: CAR Market Minute – This report changes every Tuesday. The current report will be available until Nov 8th.