By declaring a near victory in its battle with inflation, the Fed produced its first rate cut in four years on Sept. 18 – with promises for more in the coming months. But there are zero guarantees house hunters will race to again snap up California homes.
To gauge the fallout of those costlier loans, my trusty spreadsheet looked at sales stats for existing, single-family homes tracked by the California Association of Realtors from August 2024 back to January 1990. The focus was 12-month averages in order to keep a long-term view. It’s a trough deeper than the slowdown tied to 2008’s global financial crisis or the mid-1990s real estate mess.The sales crash isn’t just about the Fed. Another culprit is stubbornly high pricing.
The mix of high rates and fat gains made California homebuying even more unaffordable. Ponder the estimated house payment for the median-price house at our current mortgage rate.