21 Jun Housing Bubbles in America
Sales of existing and new homes are bound to run into some major problems in the future. When the 30-year fixed interest rates were in the 3.2%-4.2% range, people were more inclined to purchase a home. Mortgage rates have now increased to over 5%, causing less interest from potential buyers.
In San Diego, single family home prices increased 3.7% in March from just the prior month, and 29.6% year-over-year. Home prices in San Diego have risen by 317% since January 2000. This is over 4.5 times the CPI inflation rate of 70.3% since 2000, currently making San Diego have the biggest housing bubble.
Sales volume of houses in California have dropped by 8.5% since April of last year due to increasing interest rates and higher prices for homes. In the Los Angeles metro (which would also include San Diego), the sale of houses since last April have plummeted by 16.8% and the sale of condos have plummeted 22.4%.
The Most Splendid Housing Bubbles in America, May Update: Mania at the Eve of Holy-Moly Mortgage Rates