A year ago, home buying suffered as the 30-year fixed-rate loan averaged 4.9% — an eight-year high, by Freddie Mac’s count. Last Thursday, rates fell to 3.57%, a 27% one-year slide that is unparalleled in the 48-year history the agency has been tracking home-loan rates.
Yes, that’s a faster rate drop than declines of the 1980s when the Federal Reserve reversed its rate-hike efforts. Or tumbles during the mid-1990s global bond crises. Or after the housing bubble burst a decade ago.
According to ReportsOnHousing’s latest tracking of broker listing networks, demand for homes in Los Angeles, Orange, Riverside and San Bernardino counties — as measured by new escrows opened in the past 30 days — was 12,328 on Oct. 3. That’s up 14% in 12 months. While the buying spree is swift, it’s still no stampede: Escrows are actually down 1% vs. the past eight years’ average for this time of year.
These house hunters are being greeted by a shrinking inventory with 34,456 existing residences listed for sale in the four counties covered by the Southern California News Group — down 7.4% in a year but still 2% higher than the eight-year average.
This translates to homes selling quicker. Estimated market time of 84 days — listing to escrow, by ReportsOnHousing’s formula — vs. 103 days a year earlier. ReportsOnHousing considers a “market time” under 90 days as conditions favoring sellers. So this is “normal” as market time since 2012 has averaged 84 days at this time of year.
Tribune Content Agency