California’s Median Home Price Records Its Highest Year-Over-Year Gain in 15 Months
By Dolores Quintana
California home sales faced their third consecutive monthly decline in August due to rising mortgage rates and a persisting shortage of homes for sale, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) report. Despite these challenges, the statewide median home price saw its most significant year-over-year gain in 14 months.
Closed escrow sales for existing, single-family detached homes in California reached a seasonally adjusted annualized rate of 254,740 in August, reflecting a 5.3 percent decrease from July’s revised 268,940 and an 18.9 percent drop from the previous year when 314,270 homes were sold on an annualized basis. This marked the 11th consecutive month, with sales remaining below the 300,000-unit pace.
Year-to-date statewide home sales were down 29.2 percent in August.
The statewide median home price in August rose to $859,800, a 3.3 percent increase from July’s revised $832,400 and a 3.0 percent surge from $834,740 a year ago. This represents the highest median price in 15 months and the highest since California’s peak price of $893,200 in May 2022.
Jennifer Branchini, C.A.R. President, noted that despite high mortgage rates and tight inventory, prospective buyers continue to show interest in the housing market. She anticipates that once interest rates stabilize in the fourth quarter, buyers and sellers currently on the sidelines will re-enter the market.
C.A.R.’s Senior Vice President and Chief Economist, Jordan Levine, explained that elevated interest rates since April and tight housing inventory led to California home sales reaching a seven-month low in August. However, he expects macroeconomic fundamentals to soften in the last quarter of this year, gradually easing mortgage rates and supporting both the supply and demand sides of the housing market.
Key points from C.A.R.’s August 2023 resale housing report:
- All major regions in California recorded double-digit sales declines in August year-over-year.
- 43 of the 52 tracked counties experienced sales decreases compared to August last year.
- The statewide unsold inventory index (UII) stood at 2.4 in August, down 14.3 percent from a year ago.
- Active listings at the state level have fallen year-over-year for five consecutive months, with over 20 percent declines in the last four months.
- The median number of days to sell a California single-family home was 18 days in August.
- The 30-year, fixed-mortgage interest rate averaged 7.07 percent in August, up from 5.22 percent in August 2022.