Housing sales in LA County experienced a double-digit decline year-over-year in September, reflecting ongoing affordability challenges in the LA housing market.
According to a housing market report released by the California Association of Realtors (CAR) on the 20th, the median price for existing single-family homes in LA County was $994,670, marking a 1.2% increase from $983,230 in September of last year.
However, housing transactions cooled significantly. Single-family home sales in LA County dropped by 10.9% compared to the same month last year.
In Orange County, the median price for single-family homes rose 5.6% to $1.48 million from $1,401,250 during the same period, but sales volume fell by 2.0%.
The primary driver behind the drop in transactions is the rise in mortgage rates. The average 30-year fixed mortgage rate climbed to 6.86% in September, up 0.19 percentage points from 6.67% in August and 0.51 percentage points higher than the 6.35% recorded a year ago.
Analysts note that high home prices combined with escalating interest burdens are causing prospective buyers to approach transactions with extreme caution.
Broader California Housing Trends and Inventory
The broader California housing market is also continuing to experience a slowdown driven by rising mortgage rates and diminished purchasing power.
CAR reported that existing single-family home sales statewide in September reached an annualized rate of 260,410 units, representing a 6.5% decrease compared to 278,540 units in September of last year.
Consequently, California home sales have remained below the 300,000-unit annualized threshold for 48 consecutive months, remaining mired in a prolonged slump.
Despite this, statewide home prices maintained a relatively stable trajectory. The median price for existing single-family homes in September was $899,720, up 1.7% from $884,390 a year earlier, marking the fifth consecutive month of year-over-year gains.
Housing inventory saw a marginal increase. The Unsold Inventory Index (UII) for California stood at 3.7 months in September, flat from the previous month but higher than the 3.6 months recorded in the same period last year, meaning it would take 3.7 months to sell all homes currently on the market at the current sales pace.
Total active listings on the market increased by 0.5% year-over-year, marking the first time listings have risen annually in eight months.
Expert Outlook on the Market
CAR President Tamara Suminski explained, “While mortgage rates and purchasing power remain a challenge, easing market competition could give prepared buyers greater room for negotiation.”
Jordan Levine, Senior Economist at CAR, forecasted, “High-interest-rate-induced lock-in effects are restricting new supply, while scarce housing inventory continues to prop up prices despite weakened demand. Due to these opposing factors, a short-term drop in home sales will not immediately translate into an equivalent drop in prices.”
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