Throughout the pandemic, a rush on supply coupled with rock-bottom mortgage rates made the U.S. housing market a seller’s delight with prices bursting through the roofs. Now, some top economists say buyers can look forward to a break by late 2021 or early 2022. In Southern California, however, home prices could still buck the national trend.
As Business Insider reports, finance-analytics firm CoreLogic found that national home sales prices rose by 11.3 percent this March over the same time last year—the biggest jump of its kind since 2006—following 10.4 percent growth in February and 11.2 percent in January. In SoCal’s six counties, March figures rose by 14.5 percent over 2020.
Nationally, the median home sale price hit a high of $329,100 in March, up from 280,700 for the same time last year, while in SoCal that figure was $630,000 in March, up from $600,000 in December 2020.
One factor that is expected to ease prices are rising mortgage rates, which should start bringing down demand. In April, the Mortgage Bankers Association forecast rates would reach around 3.7 percent by the end of 2021, up from the current average of 2.96 percent on a 30-year fixed-rate mortgage.
As mortgages get closer to earth, many potential sellers who hesitated to list their houses during the pandemic are expected start coming forward as the crisis recedes, giving a much-needed boost to supply. While experts agree that the percentage of annual price increases across the country will begin to stabilize by this fall, even hitting single digits, just how low they’ll go remains in question.
CoreLogic chief economist Frank Nothaft told Insider that prices could dip by as much as 3.5 percent by March, while Redfin’s top number cruncher, Daryl Fairweather, believes it will hold at 5 percent.
But there’s no guarantee conditions will cool in the hot Southern California market. In April, analysts at John Burns Real Estate Consulting predicted prices will still be up by double digits this December compared with the same month in 2020. By December 2022, they forecast, prices here could even jump another 6 percent.