Want a home in California? It will probably cost more than 9 million yen.
The statewide median sales price for previously owned single-family homes surpassed $900,000 for the first time in April, a shocking statistic that highlights just how out of reach housing has become across the Golden State.
The median price in April was $904,210, an 11.4% increase from the same month last year, according to data from the California association. of a real estate agent. The median price (the point at which half of the homes sell for more than that and half for less) rose by more than $100,000 in just over two years.
The rise in home prices comes despite the fact that mortgage rates are much higher than in recent memory. The average interest rate on a 30-year fixed mortgage last week was 7.02%, more than double the interest rate of less than 3% during the COVID-19 pandemic, according to Freddie Mac.
High prices and interest rates have created the most unaffordable housing market in a generation, but economists say many homeowners are refusing to sell, forgoing interest rates below 3%, and extreme inventory He said prices continue to rise because of the shortage.
read more: Housing Tracker: Southern California home prices hit record highs
Wealthy Californians also have lots of extra cash that they can put into down payments to help offset high borrowing costs.
If prices continue to rise at 11% per year, the median home price in California will exceed $1 million in 2025.
However, that may not be the case.
In recent weeks, more homes have started coming onto the market as some owners begin to decide that a new home is more important to them than low interest rates.
Inventory remains extremely tight and economists don’t expect a sudden surge in supply, but Los Angeles, Riverside, San Bernardino and Ventura counties saw total listings increase year-over-year in April for the first time since the first half of 2023, with each county posting increases of at least 5%.
Orange County was the only county to experience a decrease, while San Diego County saw inventory increase for the second straight month, remaining 18% above a year ago.
Some experts say the increase in supply likely won’t be enough to bring down home prices, but the pace of rise in home prices should slow.
That means the $1 million median may be a little far, but it’s not that far.
“If we don’t get there in 2025, barring a significant economic downturn, we’ll probably get there in 2026,” said Jordan Levin, chief economist at the California Association. of a real estate agent.
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This story originally appeared in the Los Angeles Times.
