Los Angeles Real Estate Market Update - July 2022
Genuine improvement in inventory in the past few weeks:
Although California has been experiencing a seasonal uptick in inventory for the past few months, growth in active listings over the past few weeks has become much more meaningful. California ended April with nearly 30,000 homes available for sale across the MLS, collectively. That represents more than a 12% increase in inventory—the largest gain since before the pandemic began. That still leaves the state well behind pre-pandemic levels of available listings, but the acceleration in the pace of inventory coming online means that buyers will begin to have more options to choose from than they’ve seen in several years.
Mortgage applications have peaked and will likely weigh on home sales in the future:
Prospective homebuyers have been put off by higher rates and deteriorating housing affordability. Furthermore, general uncertainty about the near-term economic outlook, as well as recent stock market volatility, may have caused some households to delay their home search.
Mortgage applications have been falling from the 12-year highs reaches in 2021 for some time. However, in recent weeks, the decline in buyer demand has accelerated in the face of interest rates that have climbed as high as 5.41% according to daily quotes. As a result, new purchase applications have dipped, not just below 2020 and 2021, but also below pre-pandemic levels for the first time since the initial shelter in place orders were issued more than two years ago. This suggests that, although the current closed and pending sales figures remain robust, higher rates and slower economic growth will likely catch up to home sales later this year.
- California Association of Realtors - CAR