California home sales remain strong compared to last year at this time. This is good news considering that we typically experience seasonal slowing this time of year. With an increase in interest rates last week sales are beginning to slow up lately. Do not be discouraged if you have not yet found your perfect home because interest rates are still at historic lows.
The all-time low of 2.65% from the prior week has only rose to 2.79% last week. Based on historical 10-year treasury bond trends, a relatively reliable indication, mortgage rates may increase to as much as 3.2% over the next 6 months. While higher than the current rate and the historic lows, even at 3.2% that is still an amazingly affordable rate for most homebuyers.
Home sales have come out swinging in the first two weeks of 2021. Though home sales were down last week by almost 15% compared to the first week of the year, the real estate market is still off to a stronger than this same time last year.
This week residential property sales were up more than 10% compared to last year. For the second week in a row the number of pending home sales also rose again last week in three primary California real estate markets: Southern California, the Central Valley, and the Bay Area.
The California Association of Realtors forecasts that the real estate market will remain strong in 2021. The economy is starting to open up a bit, though with predictions of ‘the darkest days are not yet upon us’ the coronavirus pandemic remains a primary driving force in all of the financial markets, real estate included.