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Pending sales flat in February but holding on to recent gains
Rates did reverse course this month, so the second half of March could see weaker activity, but thus far, interest rates have been trending mostly flat, albeit with significant volatility week to week.
Market competitiveness ramps up as inventory remains tight
This year, it peaked at 36 days and has been falling for the past four weeks in a row to just 20 days last week. More homes selling above list price has been trending up and was almost half of all closed sales last week.
New home sales on the uptick
In general, rates are expected to decline later this year, and available inventory should slowly improve throughout 2024.
Rates came down slightly last week
Given the latest economic data, rates are not expected to drop as quickly and many forecasters no longer expect the Fed to begin cutting rates until the second half of the year.
Confusion and uncertainty restraining homebuyer demand
More people were applying to purchase homes when unemployment was almost triple where it is today. Buyer demand is much more depressed than can be explained by our relatively strong economy.
Nearly 98% of California’s homeowners have at least 20% home equity and, based on our analysis, even the upper-end of estimates on a price correction would leave the vast majority of homeowners with at least some positive equity, which will prevent a major increase in distressed sales should the economy turn south.
SOURCE : California Association of Realtors
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