A Seller’s Market? Consumers Express Diverging Sentiment on Home Buying and Selling in May

June 07, 2017

A Seller’s Market? Consumers Express Diverging Sentiment on Home Buying and Selling in May

Matthew Classick

202-752-3662

WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 0.5 percentage points in May to 86.2. The slight decrease can be attributed to decreases in three of the six HPSI components being larger on net than the three increases. The net share of Americans who reported that now is a good time to buy a home reached a record low after falling 8 percentage points, while the net share who reported that now is a good time to sell a home reached a record high, increasing 6 percentage points. This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy. Americans also expressed greater belief that mortgage rates will go down over the next 12 months, with that component increasing 5 percentage points. Finally, the net share of consumers who think home prices will go up fell by 5 percentage points this month.

“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market, perhaps due in part to concerns over finding an affordable replacement home. Prospective homebuyers are likely to face continued home price increases as long as housing supply remains tight.”

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae’s 2017 Home Purchase Sentiment Index (HPSI) decreased in May by 0.5 percentage points to 86.2. The HPSI is up 0.9 percentage points compared with the same time last year.

  • The net share of Americans who say it is a good time to buy a home fell 8 percentage points to 27%, reaching a new survey low
  • The net percentage of those who say it is a good time to sell increased by 6 percentage points to 32%, rising from last month’s decline to a new survey high.
  • The net share of Americans who say that home prices will go up decreased by 5 percentage points in May to 40%.
  • The net share of those who say mortgage rates will go down over the next twelve months rose 5 percentage points to -52%, following the trend from last month.
  • The net share of Americans who say they are not concerned about losing their job fell 6 percentage points to 71%, back near the level seen in March.
  • The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 5 percentage points to 18% in May.

ABOUT FANNIE MAE’S HOME PURCHASE SENTIMENT INDEX

The Home Purchase Sentiment Index (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

ABOUT FANNIE MAE’S NATIONAL HOUSING SURVEY

The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 60 percent of respondents via their cell phones (as of October 2014). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. The May 2017 National Housing Survey was conducted between May 1, 2017 and May 23, 2017. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

DETAILED HPSI & NHS FINDINGS

For detailed findings from the May 2017 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.

June 07, 2017 A Seller’s Market? Consumers Express Diverging Sentiment on Home Buying and Selling in May Matthew Classick 202-752-3662 WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 0.5 percentage points in May to 86.2. The slight decrease can be attributed to decreases in three of the six HPSI components being larger on net than the three increases. The net share of Americans who reported that now is a good time to buy a home reached a record low after falling 8 percentage points, while the net share who reported that now is a good time to sell a home reached a record high, increasing 6 percentage points. This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy. Americans also expressed greater belief that mortgage rates will go down over the next 12 months, with that component increasing 5 percentage points. Finally, the net share of consumers who think home prices will go up fell by 5 percentage points this month. “High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market, perhaps due in part to concerns over finding an affordable replacement home. Prospective homebuyers are likely to face continued home price increases as long as housing supply remains tight.” HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS Fannie Mae’s 2017 Home Purchase Sentiment Index (HPSI) decreased in May by 0.5 percentage points to 86.2. The HPSI is up 0.9 percentage points compared with the same time last year. The net share of Americans who say it is a good time to buy a home fell 8 percentage points to 27%, reaching a new survey low The net percentage of those who say it is a good time to sell increased by 6 percentage points to 32%, rising from last month’s decline to a new survey high. The net share of Americans who say that home prices will go up decreased by 5 percentage points in May to 40%. The net share of those who say mortgage rates will go down over the next twelve months rose 5 percentage points to -52%, following the trend from last month. The net share of Americans who say they are not concerned about losing their job fell 6 percentage points to 71%, back near the level seen in March. The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 5 percentage points to 18% in May. ABOUT FANNIE MAE’S HOME PURCHASE SENTIMENT INDEX The Home Purchase Sentiment Index (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier. ABOUT FANNIE MAE’S NATIONAL HOUSING SURVEY The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 60 percent of respondents via their cell phones (as of October 2014). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. The May 2017 National Housing Survey was conducted between May 1, 2017 and May 23, 2017. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae. DETAILED HPSI & NHS FINDINGS For detailed findings from the May 2017 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results. To receive e-mail updates with other housing market research from Fannie Mae’s Economic & Strategic Research Group, please click here.

How high can Southern California housing prices go? Sky’s the limit, experts say

How high can Southern California housing prices go? Sky’s the limit, experts say

While housing prices continue to rise in Southern California, experts say there is no sign of a bubble at this time. (ANA VENEGAS, ORANGE COUNTY REGISTER)
While housing prices continue to rise in Southern California, experts say there is no sign of a bubble at this time. (ANA VENEGAS, ORANGE COUNTY REGISTER) 

All hair stylist Erin Bond wants is a decent two-bedroom condo in Orange County, preferably in Huntington Beach.

But all she can afford is $400,000 to $420,000.

In a county where the median price of a condo in May was almost $500,000, she’s not sure there’s anything in her price range she can live with.

“It’s pretty disappointing,” said Bond, 35. “You can’t even buy anything that low. I mean, there are things out there, but they’re not nice.”

So Bond’s plan is to wait until the market goes down again. And if it doesn’t, “I would continue to rent.”

A lot of homebuyers are facing Bond’s conundrum.

For 62 straight months, Southern California home prices have gone in one direction. Up.

Five years ago, you could snatch up a median-priced condo in Orange and Los Angeles counties for about $280,000, 76 percent less than today’s prices. A median-priced house cost $323,000 in L.A. County five years ago and $495,000 in O.C., about $260,000 less than today’s prices in both counties.

That was then.

What should a buyer do now?

Will prices keep rising? Or as Bond thinks — along with some real estate agents — are prices close to the top?

We asked a half-dozen economists and industry analysts what the future holds for home prices in the region. Among their answers:

Southern California home prices aren’t about to drop. In fact, they believe prices will keep rising for two more years, at least, and possibly longer.

The market isn’t in a bubble — yet — although bubble talk is starting to “raise its ugly head” at cocktail parties, one economist said. Some analysts are saying Southern California home prices are showing signs of being overvalued.

If you’re thinking about buying a home, now just might be the time to act — provided you don’t overextend yourself and you plan to live there awhile.

Here are five key questions about where Southern California home prices are heading in the future.

Are we at the peak?

Not one of the economists we interviewed thinks we are, at least not for entry-level homes.

Luxury homes, priced at $2 million and up, may have reached a price peak and are facing an oversupply of listings, analysts said.

Nominal home prices have surpassed pre-recession highs in Orange and Los Angeles counties. Riverside and San Bernardino counties are about 18 percent below their price peaks. But none of those counties has reached pre-recession peaks in inflation-adjusted dollars.

One back-of-the-envelope calculation shows if home prices were to keep rising at the current appreciation rate, and inflation were to continue at the current rate, Orange County’s median home price won’t get back to the pre-recession peak after inflation for about two to three years.

Another fact to consider: During the last market run up, Southern California home prices increased year over year for 126 consecutive months, or 10½ years. That’s twice as long as the current streak in home price gains.

Lastly, analysts say home prices aren’t rising that much.

Price increases averaged 6.3 percent in Southern California in the past year, ranging from a low of 5.4 percent In Orange County to a high of 7.9 percent in San Bernardino County.

Christopher Thornberg, a founding partner of Beacon Economics and former UCLA economics professor, noted that’s only slightly greater than the rate of inflation. Pat Veling, president of Brea-based Real Data Strategies, believes the true rate of inflation is closer to 4-5 percent.

How much longer will home prices go up?

Two years at least, most economists interviewed said. Possibly longer.

How much longer prices rise depends on what happens to the overall economy.

“At some point, there’s going to be a correction, but I don’t see it on the horizon,” said Veling. “Sellers want more than sellers got six months ago.”

Projections by the California Association of Realtors show a gradual decrease in home price appreciation over the next few years, said Oscar Wei, a senior economist for the group. For example, CAR projects prices will go up 5 percent statewide in 2017, 4 percent in 2018, and 2.5 percent in 2019.

Home prices are forecast to rise 5 percent to 6 percent this year in Orange County, while rising between 8 percent and 9 percent in the Inland Empire, Wei said.

“But I don’t think in the next couple of years you’re going to see a dip in price,” he said.

Assuming the Gross Domestic Product continues to grow at 2.5 percent and mortgage interest rates stay below 4.5 percent, Southern California home prices could be going up at 6 percent a year for the next six to seven years, Thornberg said.

At 6 percent a year, the median home price could reach almost $700,000 in Southern California by 2023, $500,000 in Riverside County, $800,000 in Los Angeles County and nearly $1 million in Orange County.

“Given the supply shortage and the strength of the California economy, (that’s) perfectly reasonable,” Thornberg said. He added: “Reasonable here means it’s not a bubble and they won’t collapse.”

Are we in a bubble now?

No.

“To me, there’s nothing like these numbers that smells (like a bubble), that walks like a bubble. … We don’t have nearly enough housing to meet the demand,” Thornberg said. “The reason that (2005) was such a huge nasty bubble is because a lot of people were borrowing money they couldn’t afford to pay back. … Now, credit is hard to get. Credit is locked down.”

Statistics show vast differences between the pre-recession housing bubble and today’s market, Wei added.

Consider: Los Angeles and Orange counties had an 11½-month supply of homes for sale in the spring of 2007 compared with under four months available this year. Riverside County had an 8½-month supply of listings for sale, vs. just under four months today; San Bernardino County had a 16½-month supply, vs. four months today.

In California as a whole, 43 percent of borrowers had second mortgages in 2006, vs. 4.8 percent last year.

California’s median down payment was 11.8 percent of the purchase price in 2006, vs. 18.6 percent last year.

“We don’t have as many people over-leveraging (their homes),” Wei said.

G.U. Krueger, president of Krueger Economics, said talk about a housing bubble “is starting to raise its ugly head.”

Some of that is “cocktail party talk” and some analysts are questioning whether the Southern California housing market is overvalued.

“It doesn’t mean there is a bubble. The problem with this talk is it could affect expectations,” Krueger said. “People will start to question whether to pay the prices the housing market is asking for. There could be more negotiation going on. … But I don’t think it will result in home price declines.”

CoreLogic data suggest that Orange and Riverside counties are overvalued and Los Angeles County is modestly overvalued, said Khater, the firm’s deputy chief economist.

U.S. home prices and rents are high relative to incomes and are back to 2003, pre-bubble levels, he said. Down payments also are higher today nationally and most likely in California than at the peak of the last housing boom in 2004-06.

“More importantly, prices continue to rapidly increase in the lower end of the price distribution, where borrowers are most stretched,” Khater said. “In Los Angeles, lower end prices are up 8 percent to 10 percent on a year-over-year basis, compared to 4 percent to 6 percent for the upper end.”

When is the next recession?

Not for at least two years, economists said.

“Over the next two years, the recession probability is very low,” said UCLA economics professor William Yu, a member of the team producing the UCLA Anderson Forecast. “But beyond two years, that is very difficult to say.”

A recent report by Newport Beach-based investment firm Pimco determined the probability of a recession in the next year is less than 10 percent. But, the probability is much higher for a recession in the next five years, said the company’s annual “secular outlook.”

“If history is any guide, we believe the probability of a recession sometime in the next five years is around 70 percent,” the outlook said.

A major global calamity — like a new Korean War, a messy breakup of the euro, or a surge in oil prices — could trigger a recession, but forecasting exactly when is an extremely murky business, said Joachim Fels, a Pimco managing director and global economic adviser.

“Everybody knows that it is impossible to forecast the ups and downs of the business cycle several years ahead,” Fels wrote in 2016.

Is it too late to buy a home?

Veling, the Brea industry analyst and consultant, has advised renters for the past four years to get into the housing market while interest rates and prices still are low.

“All those who did not act are in a world of hurt,” Veling said. But, he added, it’s not too late.

“Anybody who buys houses today will probably be fine,” provided they treat it as an asset, he said. “It still boils down to buy what you can afford.”

While it’s definitely more expensive to buy a home today than it was a few years back, the cost of buying will be even greater down the road, added Wei, the CAR economist.

“If you wait, home prices probably will go up about 8 percent or so in the next couple of years. Plus you’re probably going to see some increase in mortgage rates,” he said.

For example, Wei predicted mortgage rates will go up half a percentage point this year and half a percentage point next year.

“You’re most likely seeing an increase of 10 percent or 12 percent in your mortgage payment” if you wait, Wei said.

Seasonal price fluctuations mean home shoppers do get a bit of a breather during the latter half of the year, when homebuying slows and prices dip slightly.

For example, Southern California home prices for deals signed in December averaged 3 percent less than deals signed the preceding spring, CoreLogic figures show. In Orange County, prices averaged 2.5 percent less.

“If you see something you are interested in and you can afford it — maybe not a single-family home, but a condo or a townhome — (buy it) and start building equity,” Wei said. “I wouldn’t wait.”

Complete Staging Tips

60 different tips to follow when staging a home for sale - Infographic.

Image

Daily market update: June 21, 2017

We’ll add more market news briefs throughout the day. Check back to read the latest.

Most recent market news

Wednesday, June 21

‘Consumer resilience’ boosts May existing-home sales

  • May existing-home sales rose 1.1 percent to a seasonally adjusted annual rate (SAAR) of 5.62 million — up from a downwardly revised 5.56 million in April.
  • This month’s sales pace is 2.7 percentage points above May 2016 and is the third highest SAAR sales pace over the past year.
  • The median existing-home price for all housing types in May rose 5.8 percentage points to $252,800, which marks the 63rd consecutive month of year-over-year gains.
  • Single-family home sales were at a SAAR of 4.98 million — a 1.0 percentage point month-over-month increase and a 2.7 percentage point year-over-year increase. The sales price for single-family homes increased by 6.0 percentage points to $254,600.

“The job market in most of the country is healthy and the recent downward trend in mortgage rates continues to keep buyer interest at a robust level,” NAR Chief Economist Lawrence Yun said. “Those able to close on a home last month are probably feeling both happy and relieved. Listings in the affordable price range are scarce, homes are coming off the market at an extremely fast pace and the prevalence of multiple offers in some markets are pushing prices higher.”

Mortgage rates

News from earlier this week

Tuesday, June 20

30-year fixed mortgage rates fall slightly; current rate is 3.68 percent, according to Zillow Mortgage Rate Ticker

  • The 30-year fixed mortgage rate on Zillow® Mortgages is currently 3.68 percent, down three basis points from this time last week. The 30-year fixed mortgage rate fell Tuesday, then hovered between 3.65 percent and 3.73 percent for the rest of the week before settling at the current rate.
  • The rate for a 15-year fixed home loan is currently 2.96 percent, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 2.94 percent.
  • Below are current rates for 30-year fixed mortgages by state. Additional states’ rates are available at: http://www.zillow.com/mortgage-rates.
State Current30-Year Fixed Rate (6/20/17) Last Week’s 30-Year Fixed Rate (6/13/17) Change in Basis Points
California Mortgage Rates 3.67% 3.72% -5
Colorado Mortgage Rates 3.71% 3.72% -1
Florida Mortgage Rates 3.67% 3.69% -2
Illinois Mortgage Rates 3.71% 3.73% -2
Massachusetts Mortgage Rates 3.67% 3.70% -3
New Jersey Mortgage Rates 3.68% 3.71% -3
New York Mortgage Rates 3.80% 3.76% +4
Pennsylvania Mortgage Rates 3.67% 3.68% -1
Texas Mortgage Rates 3.65% 3.69% -4
Washington Mortgage Rates 3.71% 3.74% -3

“Despite some volatility following the release of weak inflation data and relatively dovish comments from Fed officials after the Central Bank raised short-term interest rates, mortgage rates were flat last week,” said Erin Lantz, vice president of mortgages at Zillow. “We expect less volatility this week, though several Fed speeches and housing data could move markets slightly.”

Email market reports to press@inman.com.

The Road to Homeownership

The Road to Home Ownership #Infographic

Image

California Home Prices to Slow in 2017, Lowest Appreciation in 6 Years

California Home Prices to Slow in 2017, Lowest Appreciation in 6 Years

California Home Prices to Slow in 2017, Lowest Appreciation in 6 Years

According to the California Association of Realtors’ 2017 California Housing Market Forecast, following a dip in home sales in 2016, California’s housing market will post a nominal increase in 2017, as supply shortages and affordability constraints hamper market activity.

The C.A.R. forecast sees a modest increase in existing home sales of 1.4 percent next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold.  Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015.

“Next year, California’s housing market will be driven by tight housing supplies and the lowest housing affordability in six years,” said C.A.R. President Pat “Ziggy” Zicarelli. “The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales. As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as home buyers migrate to peripheral cities with more affordable options.”

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 2.2 percent in 2017, after a projected gain of 1.5percent in 2016. With California’s nonfarm job growth at 1.6 percent, down from a projected 2.3 percent in 2016, the state’s unemployment rate will reach 5.3 percent in 2017, compared with 5.5 percent in 2016 and 6.2 percent in 2015.

The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.0 percent in 2017, up from 3.6 percent in 2016, but will still remain at historically low levels.

The California median home price is forecast to increase 4.3 percent to $525,600 in 2017, following a projected 6.2 percent increase in 2016 to $503,900, representing the slowest rate of price appreciation in six years.

“With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity.”

california-housing-forecast.jpg

California Home Prices to Slow in 2017, Lowest Appreciation in 6 Years

California Home Prices to Slow in 2017, Lowest Appreciation in 6 Years

California Home Prices to Slow in 2017, Lowest Appreciation in 6 Years

According to the California Association of Realtors’ 2017 California Housing Market Forecast, following a dip in home sales in 2016, California’s housing market will post a nominal increase in 2017, as supply shortages and affordability constraints hamper market activity.

The C.A.R. forecast sees a modest increase in existing home sales of 1.4 percent next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold.  Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015.

“Next year, California’s housing market will be driven by tight housing supplies and the lowest housing affordability in six years,” said C.A.R. President Pat “Ziggy” Zicarelli. “The market will experience regional differences, with more affordable areas, such as the Inland Empire and Central Valley, outperforming the urban coastal centers, where high home prices and a limited availability of homes on the market will hamper sales. As a result, the Southern California and Central Valley regions will see moderate sales increases, while the San Francisco Bay Area will experience a decline as home buyers migrate to peripheral cities with more affordable options.”

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 2.2 percent in 2017, after a projected gain of 1.5percent in 2016. With California’s nonfarm job growth at 1.6 percent, down from a projected 2.3 percent in 2016, the state’s unemployment rate will reach 5.3 percent in 2017, compared with 5.5 percent in 2016 and 6.2 percent in 2015.

The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.0 percent in 2017, up from 3.6 percent in 2016, but will still remain at historically low levels.

The California median home price is forecast to increase 4.3 percent to $525,600 in 2017, following a projected 6.2 percent increase in 2016 to $503,900, representing the slowest rate of price appreciation in six years.

“With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity.”

california-housing-forecast.jpg

Previous Older Entries