May's mortgage rates averaged 6.8%, slightly lower than last year's 7.1%, but this did not revive California's stagnant housing market. California's home prices dropped 1% annually, the first decline since June 2023, largely due to severe affordability issues. Statewide home sales fell by 4%, the largest drop in 17 months. Meanwhile, an increase in housing supply occurred as more homeowners opted to sell, contributing to longer average market days, which rose by five days since last year. Job growth remained slow at 0.5%, with a slight hike in unemployment to 5.3% in May.
In May, the average 30-year mortgage rate fell to 6.8%, down from 7.1% in May 2024, yet affordability issues led to continued price drops in California's housing market.
California's home prices decreased by 1% since May 2024, marking the first annual drop since June 2023. This decline was partly due to a significant lack of housing affordability.
Despite lower mortgage rates, California home sales fell by 4% year-over-year in May, reflecting the greatest decrease in 17 months and highlighting the current economic challenges.
The number of months of home supply in California increased by 46%, indicating more homeowners are selling, but homes are staying on the market longer, now averaging 21 days.
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