A recent uptick in mortgage rates has caused home sales in California to take a stumble. According to the California Association of Realtors, closed escrow sales of existing, single-family homes in California decreased 4.5 percent from January to February. While they are still up 9.7 percent from a year ago, tight supply coupled with higher borrowing costs are promoting concerns from industry experts.
“While higher rates may slow growth in home sales temporarily, the major roadblock in the long run is a shortage of homes for sale,” said CAR President Dave Walsh. “With inventory dropping from a year ago, the market will soften in the second half of 2021 if we don’t see enough homes come on the market to meet demand.”
Although mortgage rates have climbed slightly from their record bottom, they remain low from a historical perspective. Today, conforming no-point 30-year fixed mortgage rates are averaging 3.0 percent and 15-year rates are near 2.375 percent.
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