Los Angeles' Shifting Real Estate Market - JULY/AUG 2022
As the market shifts, prospective homebuyers are beginning to enjoy some of the benefits of a shifting market. To be sure, rising rates have reduced buyer purchasing power, but rising inventories and reduced competitiveness means that buyers who remain in the market have a better shot at having their offer accepted than at any point since the pandemic began.
Inventory Now Exceeds Pre-Pandemic Levels:
After more than two years of consistent year-over-year declines in the number of active listings available for sale, the inventory shortage has shown consistent signs of improving in recent weeks. In the third week of July, there were more active listings on the market than at any time in the past two years.
It is important to note that listings still remain depressed by historical standards, but it is encouraging to see them trend upward on a more consistent basis this year.
As the number of homes to choose from rises, homebuyers are finding the market less frenzied than at any point since the pandemic began as mortgage volume applications reached their lowest level in 22 years towards the end of July.
Taken together with a recent reduction in rates, buyers currently in the market should be encouraged by rising prospects of finding a home and having their offer accepted.
Mortgage volume applications reached their lowest level in 22 years towards the end of July. At 5.51%, rates are still lower than they were last month, but that represents a 20 basis-point increase from the week prior. Given the expectation of a rate increase in the 75-100 basis-point range at the upcoming Federal Reserve meeting, it is likely that mortgage rates will continue their upward trend as inflationary pressures remain.
- California Assocation of Realtors (CAR).