Bounceback for Californian housing market

Existing single-family home sales in California jumped in May compared to April with a seasonally-adjusted annualized rate of 430,060, up 5.4% from April and 2.6% compared to May 2016.
 

California Association of Realtors says that prices statewide were up 2.3% month-over-month and 5.8% year-over-year to a median $550,200.
 

"Mortgage rates dropping to the lowest level since November could have been a motivating factor for the sales increase in May," said C.A.R. President Geoff McIntosh. "The low interest rate environment, however, may not last long as the Federal Reserve's gradual rate hike and plan to reduce its balance sheet will likely lead to higher rates, and could change the momentum of the market."
 

Rising mortgage rates are not the only issue facing the market as there is a mismatch between buyer demand and the homes available to buy.
 

"Stubbornly low supply levels will continue to propel prices higher and, when combined with imminently higher interest rates, will worsen an already dismal affordability situation in the housing market," warned C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young.

The largest rise in sales in May was in the Inland Empire (9%) while the Los Angeles Metro Area (6.9%) and San Francisco Bay Area (4.9%) also saw strong gains.