CAR predicts a one percent uptick in existing single-family home sales next year that will reach 426,200 units, up slightly from the projected 2017 sales figure of 421,900. The 2017 figure was 1.3 percent higher when compared with the 416,700 homes sold in 2016.
Also, the California median home price is forecast to increase 4.2 percent to $561,000 next year, following a projected 7.2 percent increase in 2017 to $538,500. The average for 30-year, fixed mortgage interest rates bump up to 4.3 percent in 2018, up from four percent in 2017 and 3.6 percent in 2016. However, CAR noted this remains low by historical standards.
"Solid job growth and favorable interest rates will drive a strong demand for housing next year," said CAR President Geoff McIntosh. "However, a persistent shortage of homes for sale and increasing home prices will dictate the market as housing affordability diminishes for buyers struggling to get into the market."