Sharp Decline in Pending Sales, Inventory Surges In California

From the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.): Home sales in California dip below pre-pandemic levels as the effects of rising interest rates begin to show even as prices set another record, C.A.R. reports

May’s sales pace was down 9.8 percent on a monthly basis from 419,040 in April and down 15.2 percent from a year ago …

Pending home sales declined 30.6 percent in May – the biggest drop since the first month of the pandemic – likely due to eroding affordability, rising mortgage rates and home prices, and the increased risk of a recession,” said C.A.R. Vice President and Chief Economist Jordan Levine …

With both closed sales and pending sales slowing by double-digits, total active listings experienced a gain of 46.7 percent in May, the largest year-over-year growth in at least the last 89 months. Active listings in May also climbed to the highest level since July 2020 and had a month-to-month increase of 26.4 percent from April.

emphasis added

This California report was for May. With the recent increase in mortgage rates, sales will decline further – and inventory will increase.

Source: by Bill McBride | Calculated Risk Newsletter