Desert Real Estate News for January show Interest Rates Hit Another New All-Time Low: Interest rates remain the accelerant in the market through year’s end as the 30-year fixed-rate mortgage hit its 15th all-time low again last week. According to Freddie Mac, the typical rate during the holiday week was just 2.66%. That is down only 1 bps from the week before, but rates have now been below 3% for 22 consecutive weeks providing a tremendous boost to purchasing power for consumers. This is also likely resulting in more competitive offers driving up home prices as well.
Stay At Home Orders Extended as Medical System Strains: The State of California extended its stay at home order until late January this week as the number of new infections, deaths, and critically, hospitalizations, increase dramatically after the holidays. The vaccines have begun to roll out in earnest to front-line healthcare workers and vulnerable populations, but we are still several months out from the widespread vaccination that is needed for ‘herd immunity’ to allow for more normal economic interactions.
Sobering California Population Data Released Recently: C.A.R. has long been advocating for more housing supply, arguing that a lack of affordability and persistent homeownership gaps could ultimately lead to problems with housing demand in California. And, while population growth has been slowing dramatically in recent years, 2020 was the first year in more than 100 years where the Census reports that California saw its population decline. Additional estimates from the Department of Finance show that outmigration accelerated this year and outmigration was larger than foreign immigration, so new births were the only net increases we experienced. This creates tremendous economic challenges moving forward and underscores the need for real housing supply solutions right now—particularly as increased flexibility and remote work become, at least partially, a permanent feature of the labor markets.