New relief funding and worries for homebuyers

Posted: 3/08/2016

The most recent reports from the California Association of Realtors (CAR) highlight the ongoing affordability and high-cost issues of mortgages and housing across the state. Only 30 percent of households can afford to purchase a median priced home in the State of California. It is predicted that if current interest rates rose to 6%, only 25 percent could afford a median priced home.
Compared to a year ago home prices have gone up a dramatic 8.1%, with most of those gains seen in the first four months of 2015. Since April of 2015, home prices have mostly stagnated and are predicted to continue to stay stagnant but resilient.

"The fundamentals underlying the demand for housing fueled a healthy start to 2016," said Leslie Appleton-Young, CAR Vice President and Chief Economist. "The volatility in the equity market in the last few weeks, coupled with increasing uncertainty about the impact on economic growth, however, may lead potential home buyers and sellers to take a "wait and see" approach, which could erode housing market activity in the upcoming months."

Nationally, ongoing worries about the housing sector have allowed an expansion of funding for assistance relief programs. California will receive about $213.5 million in the first distribution of new funding, which will help assist homeowners with foreclosure alternatives and relocation funds. Treasury Secretary Jacob J. Lew said the expansion is “next step in the administration’s effort to help struggling homeowners recover from the financial crisis, and strengthen the housing recovery.”