Home News California: Rising mortgage rates are slowing the housing market, but buying a home may still be out of reach for many in SoCal

California: Rising mortgage rates are slowing the housing market, but buying a home may still be out of reach for many in SoCal

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The housing market has cooled this year after mortgage rates on 30-year fixed mortgages have more than doubled in the past 12 months to about 7%.

“This has definitely impacted sales in the housing market,” said Oscar Way, deputy chief economist at the California Real Estate Association. said.

car data show A typical price for a single-family home in Southern California is about $743,000. It’s down about 8% from its peak in May, but up about 2% from last year.

The most expensive county is Orange County, where a typical home costs $1.2 million as of October.

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“If someone actually puts in a 20% down payment and puts a third of their income toward housing in Orange County, that would be about $278,000 in household income,” says Wei.

Analysis by real estate firm Redfin found For example, the annual income required to pay a typical mortgage in Anaheim is over $254,000.

Anaheim’s typical annual household income is about $77,000. According to census data.

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“Even within Southern California, there are areas that are more affordable than others, such as Riverside and San Bernardino, which are probably a little more affordable than LA, Orange County, and San Diego,” Wei said. said Mr.

According to data from the California Association of Realtors, only 13% of people living in Orange and LA counties can afford a regular-priced home.

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Wei said first-time homebuyers could have a hard time buying a home because existing homeowners can use their shares to buy.

“A lot of them can actually use the stock they’ve gotten in the last two years, so they can sell the property and use the stock and actually use it for their next home,” he said.

He said potential homebuyers should also consider property taxes and home insurance when buying a home.

Wei said people shouldn’t expect a significant drop in mortgage rates until late 2023 or early 2024.

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