California home sales in July posted higher for the second straight month, and while the statewide median home price rose from the previous month as well as a year ago, the pace of appreciation continued to slow.
A report by the California Association of Realtors (CAR) showed that closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 398,940 units in July, according to information collected from more than 90 local Realtor associations and multiple listing services (MLS) statewide.
July marked the ninth straight month that sales were below the 400,000 level and a full year that sales have declined on a year-over-year basis. Sales in July increased 1.2% from a revised 394,250 in June but were down 10% from a revised 443,500 in July 2013. The July 2014 sales rate was the highest since October 2013.
The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
"It's encouraging that home sales have risen in the past two months, but low housing affordability and stringent underwriting standards are still holding back sales," said CAR president Kevin Brown.
"However, recent news of changes to how credit scores are determined should make it easier for first-time buyers who are on the cusp of qualifying and others who are having a difficult time getting a loan because their credit scores are less than satisfactory," he added.
The statewide median price of an existing, single-family detached home edged up 1.6% from June's median price of $457,630 to $464,750 and up 7.1% from the revised $433,740 recorded in July 2013. The statewide median home price has increased year over year for the previous 29 months, marking more than two full years of consecutive year-over-year price increases.
The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.
"While the market improved on a month-to-month basis, statewide home sales experienced another double-digit loss on an annual basis and is down 10.2% year to date," said CAR vice president and chief economist Leslie Appleton-Young. "Last July's sales level was higher than normal as sales increased in response to rising interest rates as the markets anticipated the Fed's 'tapering initiative.'"
"Moving forward, improving inventory, recent lower interest rates, and a tempering of home prices should help spur sales in the coming months," she added.
Other key facts from CAR's July 2014 resale housing report include:
• Housing inventory moved slightly higher in July, with the available supply of existing, single-family detached homes for sale increasing from 3.7 months in June to 3.8 months in July. The index was 2.9 months in July 2013. A six- to seven-month supply is considered typical in a normal market.
• The median number of days it took to sell a single-family home also rose in July, up from 33.9 days in June to 35.7 days in July and up from a revised 27.9 days in July 2013.
• Mortgage rates dipped in July, with the 30-year, fixed-mortgage interest rate averaging 4.13%, down from 4.16% in June and down from 4.37% in July 2013, according to Freddie Mac. Adjustable-mortgage interest rates in July averaged 2.39%, down from 2.40% in June and down from 2.66% in July 2013.