Should I buy a house Now?
The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, was released in September. Case-Shiller has a few indexes they use, two of which we pay the most attention to; The National Index and the 20-city Index. In September 2019 the Federal Housing Finance Agency (FHFA) released their Home Price Index, which measures home price appreciation on single family homes with conforming loan amounts.
The report showed that home prices rose 0.2% in June and 5% year over year. This was an acceleration from the previous report, which was reported at 4.8%. It is logical to think that the FHFA report is running hotter than the Case Shiller, as it covers homes with conforming loan limits, which doesn’t have to but likely represents lower priced homes, which are in very high demand.
The bottom line is that homes near the median home price are on fire and the higher you go away from the median price the slower the pace of selling.
In Los Angeles county, year to date sales are up 4% and average detached home prices have risen $5000 in July to $550,000 an almost 1 % rise for the month. Home prices are up $15,000 over last July.
When To Buy
Waiting for prices to flatten out does not bring much hope to those wanting to buy a home in LA. Although the volume of affordable homes available for sale remain constrained in LA County, the mortgage payment has declined considerably, because interest rates are below 4% and could go lower before the end of December. This is potentially enabling more buyers to get into home ownership. Therefore, keeping inventory of houses for sale on the market lower than average.
If you are in the market to buy a home, now is the time, even if it’s a competitive market to buy in. It is worth the work to find a home you can buy. The economy is predicted to continue to grow and prices will not come down soon. Call me before the rates increase.
Contact me at (562) 544-0449 for any questions about purchasing your first home or buying an investment property.