California’s median home price reached a new high in May at $600,860, surpassing its previous peak of $594,530 11 years ago.
Home sales declined by 1.8 percent from April and down 4.6 percent compared to May 2017 levels.
May marked the first year-over-year sales decline in four months and the lowest sales level in more than a year.
In Santa Barbara, median home price reached a new historic high in May at $1.2 million, while inventory continues to remain low.
“The softening in May home sales was due in part to the spike in interest rates in mid-April, when the 30-year fixed mortgage rate jumped 20 basis points in just one week to reach the highest level since 2014,” said Steve White, California Association of Realtors president.
“Homebuyers may have postponed escrow closings to wait out the effects of the rate surge,” White said.
“Additionally, the specter of rate increases earlier in the year may have pulled sales forward into the first quarter, which resulted in the subpar performance in the last couple of months,” he said.
“Looking ahead, higher mortgage rates and elevated home prices will heighten affordability constraints that will likely temper the housing market in the coming months,” he said.