California home prices soar in April
California home prices hit a new statewide median price record. The California Association of Realtors reported that the median price paid for a resale home in April was $602,920, up 6.5% month-over-month, from $565,880 in March. Year-over-year, the median price was up 3.8% from $584,460 last April.
Prices dropped in the last six months in 2018, but have soared in April to exceed the peak levels set last June. The number of existing home sales in California totaled 396,769 on a seasonally adjusted annualized basis, down 4.8% from the number of homes sold last April. The unsold inventory index showed a 3.4-month supply of homes for sale, up from a 3.2-month supply one year ago.
On a regional basis, the median price paid for a home in Los Angeles County rose 3%, Orange County rose 0.9%, and Ventura County dropped 2.3% from April 2018.
California homes more affordable
Lower rates and moderating prices made California homes more affordable in Q1 2019. The California Association of Realtors reported that the percentage of home buyers who could afford to purchase a median-priced home in California rose to 32% in the first quarter of 2019. It’s up from 28% in the fourth quarter of 2018, and it’s also up from 31% for the first quarter of 2018. The minimum annual income of $114,860 was needed to purchase a $545,820 statewide median-priced existing single-family home.
Condos and townhomes were more affordable, with 41% of California households could afford a median-priced condominium or townhome. That was up from 37% in the last quarter of 2018.
The Dow Jones Industrial Average closed the week at 25,764.00, down 0.7% from 25,942.37 last week. It’s up 10.4% year-to-date. The S&P 500 closed the week at 2,859.53, down 0.8% from 2,881.40 last week. It is up 14.1% year to date.
The NASDAQ closed the week at 7,816.28, down 1.3%, from 7,916.94 last week. The NASDAQ is up 17.8% year-to-date.
Treasury bond yields continue to drop
The 10-year treasury bond closed the week yielding 2.39%, down from 2.47% last week. The 30-year treasury bond yield ended the week at 2.82%, down from 2.89% last week. We watch treasury bond yields because mortgage rates follow bond yields.
Mortgage rates almost unchanged this week
The May 16, 2019, Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.07%, down slightly from 4.10% last week. The 15-year fixed was 3.54%, down slightly from 3.57% last week. The 5-year ARM was 3.66%, slightly higher from 3.63% last week.
Stock market terms defined
- ARM – “A 5-year ARM is a loan with a fixed rate for the first five years. After that, it has an adjustable rate.” (LendingTree.com)
- Bull market – “The condition of a financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.” (Investopedia.com)
- Down Jones Industrial Average – “An index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the NASDAQ.” (Investopedia.com)
- Federal Reserve System – “Often referred to as the Federal Reserve or simply “the Fed,” is the central bank of the United States. It was created by Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system.” (FederalReserve.gov)
- Freddie Mac – (Federal Home Loan Mortgage Corporation or FHLMC) “A government-owned corporation that buys mortgages and packages them into mortgage-backed securities.” (TheBalance.com)
- Mortgage – “An agreement that allows you to borrow money from a bank or similar organization (such as a credit union) by offering something of value, esp. in order to buy a house or apartment” (Cambridge Dictionary)
- NASDAQ – Acronym for the National Association of Securities Dealers Automated Quotations. “A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks.” (Investopedia.com)
- S&P 500 – “The S&P 500 index is a basket of 500 of the largest U.S. stocks, weighted by market capitalization. The index is widely considered to be the best indicator of how large U.S. stocks are performing on a day-to-day basis.” (Motley Fool)
- Stock market – “The stock market is where investors buy and sell shares in public companies.” (NerdWallet.com)
- Treasury bond yield – “Treasury yields are the total amount of money you earn by owning U.S. Treasury bills, notes, or bonds. The U.S. Treasury Department sells them to pay for the U.S. debt. … Treasury yield prices are based on supply and demand.” (The Balance.com)
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