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California Weekly Market Data ending September 11, 2023

Lack of affordability and tight supply keep homebuyer confidence at low level

Those who believed that it is a good time to buy remained at 18%, the lowest level the market has seen in at least the last three years. Consumers have become more positive about home selling since earlier this year as home prices continued to stabilize and housing supply remained tight.

Share of homes with negative equity remains low in California

Home equity dropped on a year-over-year basis in the second quarter of 2023 but improved on a quarterly basis from the first quarter of 2023, reported by CoreLogic’s latest Homeowner Equity Insights report.

Soft landing odds improve… for now

The resilience of the U.S. economy continues to surprise economists to the upside and the chance of falling into a recession has been lowered again. The probability of the U.S. entering a recession in the next 12 months has been reduced to 15% from an earlier 20%, according to Goldman Sachs’

Households not as optimistic about their financial conditions as before

Despite a solid job growth and decent economic conditions in the first half of the year, consumers have become less confident about their financial situations as the labor market began to slow while costs of borrowing remained high.

New supply continues to soften rent growth

Long gone is the day when the market had double-digit rent growth, and apartment rents could see year-over-year declines in coming months. Rents at the national level in August only increased 0.28% from 12 months ago, according to real estate tech platform RealPage.

The economy will likely show more signs of slowing later this year and the Central Bank will have no choice but to cut rates starting in the first quarter of 2024.

Rates will decline starting in the fourth quarter of this year and will further improve next year. The decline will likely be gradual though.

SOURCE : California Association of Realtors

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