Unfortunately, it’s bad news for buyers again. Prices are up, and new listings are down MoM. Throw in mortgage rates being close to the highest they’ve been all year, and the woes of being a buyer in this market continue.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|
Homes for sale |
-16% |
+4% |
|
New Listings |
-30% |
-4% |
|
Homes in escrow |
-20% |
+4% |
|
Closed sales |
-24% |
+2% |
|
Median sale price |
-6% |
+2% |
Last month we saw a noticeable increase in new listings, and there was hope it was a sign of things to come, but it was short-lived. Typically August in LA is a slow month, so unless July brings an increase in new listings, we will continue to see a seller-friendly market. In July last year, prices cooled off a lot, so expect to see the prices edge closer to zero and, more likely, up YoY. Also, expect to see the closed sales gap significantly reduced.
Rates
Interest rates were hammered last week, fueled by news from the labor market. It was mixed news, but enough to scare investors, causing the bond market to react severely and push mortgage interest rates higher. As of writing, interest rates are almost the highest they’ve been for the year. This might cool the market down a little bit. Again, don’t let the headlines inform you what rates are. They will always publish the rate a high credit risk buyer will get instead of the rate most buyers here in LA are getting.
The Fed
Until the Fed spoke last month, most people were expecting no more rate increases this year. However, with inflation still not under control, the Fed is now considering up to two rate hikes for the rest of the year. This could cause mortgage rates to increase as the year progresses and cool the market. Although it’s hard to predict, it’s up to investors and how they interpret the data.
