Real estate remains a bright spot in the economy with mortgage rates dropping to another historic low yesterday–for the eighth time this year. Freddic Mac, the mortgage buyer, reported the 30-year fixed mortgage now stands at 2.88 percent while the 15-year fixed fell to 2.44 percent. These historically low rates have been driving purchase demand to the point that it now stands more than 20-percent above a year ago, noted Freddie Mac.
Meanwhile, the National Association of Realtors recently reported that pending home sales in June increased more than 16 percent from May and are up over six percent above a year ago. This is the second consecutive month of gains as well as the first year-over-year increase since Covid-19’s impact on the housing market. However, a word of caution comes from Corelogic which issued its report on May housing a few days ago. Corelogic noted the future of home prices and the potential impact of business closings on unemployment is still uncertain. On the other hand, inventories may be the biggest supporter of future price growth.
Housing inventory, particularly at the low end, remains relatively low in East Bay. In Lamorinda–which includes the towns of Lafayette, Moraga, and Orinda–101 homes closed in July with an average sale price of $1,846,845, according to the Multiple Listing Service. This is slight higher than 1 percent over the list price. In all areas, homes at the low end are moving quickly, some prior to being actively listed for sale but rather on the MLS with the notice “Coming Soon”.