 Mortgage rates dropped to their lowest level since October 2016 due to weaker economic data over the past week.
The 30-year fixed-rate mortgage averaged 3.49% during the week ending Sept. 5, down 9 basis points from the previous week, Freddie Mac reported Thursday. Rates for 30-year home loans have only increased nine times so far this year — otherwise, they have dropped or remained flat from week to week. The 15-year fixed-rate mortgage moved down 6 basis points to an average of 3.00%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.30%, falling 1 basis point.
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 California is on the verge of having statewide rent control.
Assembly Bill 1482—which will bar landlords from hiking rents more than 5 percent, plus local inflation, in one year—was approved this afternoon in the state Assembly on a 46-22 vote. Inflation varies by region, but averages about 2.5 percent in California. The bill now heads to Gov. Gavin Newsom’s desk; he has said he will sign it. Assembly member David Chiu (D-San Francisco), who authored the bill, says the rent cap is designed to prevent “rent gouging” and “egregious” increases.  The 2008 financial crisis brought the global economy to its knees and sent American home prices into freefall. For anyone who managed to hang on to their job, savings, and credit score, the aftermath of the crisis was a prime opportunity to buy a house at a bargain price.
The Great Recession is the only economic downturn millennials have lived through as adults, so, naturally, they might think that the next recession—which more and more economists believe will hit by 2021—will present a chance for many millennials to finally join the ranks of homeownership. It doesn’t bring me joy to report that this is unlikely to be the case. The last recession was an anomaly in more ways than one, and its effect on the housing market is the biggest outlier relative to other recessions. The 2008 recession didn’t cause the housing market to go into freefall. The housing market going into freefall caused the recession.  Home prices in LA County surged to $635,000 in July, shattering an all-time record for the second month in a row.
The county’s median sale price rose 2.8 percent since June and a full 5 percent since July 2018, a new report from real estate data tracker CoreLogic shows. That was the largest yearly gain since November. CoreLogic analyst Andrew LePage says in a report that the bump in prices may be due in part to falling mortgage interest rates, which have reduced monthly costs for homebuyers who aren’t making all-cash purchases. Across all of Southern California, sale prices rose 2 percent year over year. But LePage points out that average mortgage payments dropped 7 percent in the same time period due to declining interest rates. In Los Angeles, home price increases continue to be accompanied by sluggish sales. Last month, 6,965 homes sold countywide—exactly one fewer than in July 2018, despite the fact that this year the month had one additional business day for sales to process. Across all of Southern California, sales during the month were 2.9 percent below average (excluding the bubble years leading up to the 2008 Great Recession). In LA County, median sale prices eclipsed the $600,000 mark for the first time in May 2018. LePage says that how high home values grow will probably be determined by a combination of “mortgage rates, buyer confidence, job and income growth, and inventory levels.” Though many economists expected mortgage interest rates to climb in 2019, they’ve instead dropped, creating a lending environment favorable to buyers—but also encouraging price growth. LA’s median sale price in July was a full $17,000 higher than a month before. Photo Credit: abc7 Source: Realtor.com  Builders in Los Angeles County are reported to be on track to completing nearly 10,000 new homes before the end of the year. The 9,400 units of housing on the way in the second half of 2019 is higher than the number of units constructed in all of 2018—or 2017.
Most economists agree that building new housing is a key part of addressing steep rental prices and home costs throughout the state. Gov. Gavin Newsom pledged last year to oversee construction of 3.5 million new homes by 2025. If distributed according to population, that would leave LA County responsible for contributing nearly 900,000 residences to that total. |
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