H
ome sales in Southern California have slowed down due to high interest rates and economic uncertainty. According to the National Association of Realtors, previously owned home sales fell 2.7% from May to 3.93 million units on a seasonally adjusted, annualized basis in June. This decline was more significant than expected, with analysts predicting a drop of just 0.7%. Sales remained unchanged from June 2024.

    High mortgage rates are the primary reason for this slowdown, with the average rate currently at 6.77%. Lawrence Yun, chief economist for the NAR, notes that if mortgage rates were to decline to 6%, an additional 160,000 renters would become first-time homeowners, and sales activity from existing homeowners would increase.

    The supply of homes continues to rise, with a 4.7-month supply at the current sales pace. This is up 15.9% year over year and represents a lean market. The median home price in June was $435,300, a 2% annual increase and another record high for the month.

    Sales are outperforming on the higher end of the market, with homes priced above $1 million jumping 14%. First-time buyers represented 30% of sales, down from their historical average of 40%. All-cash deals remained elevated at 29% of sales. Homes listed received an average of 2.4 offers, down slightly from last month and a year earlier.