California’s Housing Market Retreats 3rd Straight Month, Affordability Crunch Dampens Demand
California’s housing market backpedaled in July on an annual basis for the third consecutive month, as higher interest rates and rising home prices eroded housing affordability and dampened demand. New research by the California Association of Realtors (C.A.R.) reveals closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 406,920 units in July.
July’s sales figure was down 0.9% from the revised 410,800 level in June, and down 3.4% compared with home sales in July 2017 of 421,460.
C.A.R. President Steve White says, “In the midst of the peak home-buying season, high home prices and rising interest rates combined to crimp housing affordability, which in turn is subduing home sales. Some of the reluctance by buyers appears to be driven by fears that the market may be peaking. Additionally, the lack of a federal tax incentive for homeownership could be at play, given that much of the weakness is in the lower-priced, first-time buyer segment of the market.”
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