House prices shot up by more than 8 percent in Los Angeles County and the Inland Empire in the 12 months ending in May, while Orange County prices rose by more than 6 percent, according to the CoreLogic Home Price Index released Tuesday, July 3.
Los Angeles County house prices increased 8.3 percent year over year, the index showed, while prices rose 8.2 percent in Riverside and San Bernardino counties. It’s the third straight month that price appreciation topped 8 percent in Los Angeles and inland counties.
Orange County prices rose 6.2 percent, the third month in a row that price gains were at 6 percent or more, CoreLogic figures show.
All three areas have seen price gains at or near two- and three-year highs since last fall, even as home sales have lagged last year’s levels.
House prices increased nationally by 7.1 percent from May 2017 to this past May, while California prices were up 8.9 percent.
“The lean supply of homes for sale is leading to higher sales prices and fewer days on market,” said Frank Nothaft, chief economist for CoreLogic. “The supply shortage is more acute for entry-level homes.”
One reason fewer homeowners are putting their houses on the market: About half of all homes have a mortgage rate of 3.75 percent or less – almost a full percentage point below current levels, Nothaft said.
As a result, an increasing number of homeowners are keeping their low-rate loans rather than sell and buy another home with a higher interest rate and heftier payments, he said.
A recent housing sentiment study by CoreLogic and Norwalk-based RTi Research found that 15 percent of homeowners hope to buy a home in the next year while only 11 percent want to sell. In addition, 28 percent of renters are hoping to buy a home. The survey showed some markets have four times as many renters looking to buy than homeowners planning to sell.