2019 has been the best year for mortgage rates. As we enter into the second half of this year rates continue to hold a historic low at an average below 4.0 percent, and monthly mortgage payments have declined. Home prices in California are still high but have begun to remain neutral or flatten. Overall, the home cost rise has been the slowest in the last 7 years only increasing around 2.1 percent.
The national economy and the California economy both have a positive outlook. Consumerism is robust, unemployment is still low at 3.7 percent and California had another good boost in job growth 1.5 percent.
Affordability continues to be an issue due to current high costs and slow moving job wage growth. Lack of inventory is present but there was a slight improvement in pace to 3.6 months. This makes it a better time for sellers, while buyers find limited options and more competition.
It’s possible the Fed may make another rate cut in 2019 due to uncertainty and volatility. Another factor is the resume of Trade Wars between the U.S and China.
The housing market overall is in a good foundation with resilience and won’t be the culprit of a recession that is expected to come in 2020.
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