Written by David Castellon
California’s median home price edged higher to another peak for the second straight month, as lower interest rates helped bolster home sales in May, the California Association of Realtors reports.
Sales of existing, detached, single-family homes that closed escrow totaled a seasonally-adjusted annualized rate of 406,960 units in May, according to information collected by C.A.R. from more than 90 local realtor associations and statewide multiple listing services.
At the regional level, median home prices were up from a year ago in the Central Valley, Los Angeles Metro area and the Inland Empire, while down in the Central Coast and Bay Area.
Median prices improved from the prior year in all Central Valley counties, with Kings County increasing the most at 10.6%. Kern County had the smallest year-over-year price growth of all the Valley counties at 1.7%.
The numbers provided by C.A.R represent what the total number of homes sold in 2019 would be if sales maintained the May pace throughout the year, though the numbers are adjusted to account for seasonal factors that typically influence home sales over a year.
May’s sales were up 2.6%, based on April sales and down .6% from home sales in May 2018.
In addition, the calculated sales rose above 400,000 for the first time since July 2018 and reached the highest level in 11 months, while the year-to-year sales dip was the smallest in 13 months.
“The lowest interest rates in nearly a year and a half, no doubt, have elevated housing demand, as monthly mortgage payments have become more manageable to home buyers in general,” C.A.R. President and Fresno Realtor Jared Martin said in a press release.
“The state’s housing market remains soft, however, as home sales continue to lag behind last year’s level for more than a year now.”
After surpassing its prior price peak in April 2019, the statewide median home price reached another new, all-time high in May, $611,190, up 1.4% from $602,920 in April and up 1.7% from $600,860 in May 2018.
“While lower interest rates have spurred buyer demand in recent months, they also have played a role in ongoing price hikes,” C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young said in the same release.
“Buyers could offer higher prices without hurting their bottom lines and maintain the same level of affordability, as rates remain on a downward trend. With mortgage rates expected to stay low in the upcoming months, home prices may inch up further for another month or two before cooling off.”