The number of San Diego County homes for sale has dropped by 53 percent since 2020, and there are a lot of factors that could keep inventory low. It’s not just in sunny Southern California where this is happening. Nationally, listings are down 31 percent in the same time period.

There were 2,968 homes listed for sale in San Diego County in the week ending June 11. That compares to 6,310 at the same time in 2020.

In a new study, home inventory had its biggest decline in more than a year in June, largely because homeowners are hesitant to move with lower mortgage rates locked in at current homes.

That trend will probably persist, as the Fed’s announcement that it may hike interest rates a few more times is likely to keep mortgage rates elevated.

The study said 91.8 percent of U.S. homeowners have an interest rate below 6 percent. It breaks down the data even further and says 62 percent of owners have a rate below 4 percent and 23.5 percent have a rate below 3 percent.

The interest rate for a 30-year, fixed-rate mortgage was 6.69 percent last week, said Freddie Mac, up from 5.78 percent the year before.

A decade-long homebuilding slump has also contributed to the lack of homes for sale, and historically low interest rates in 2020 and 2021 led to a home-buying boom that further depleted inventory.

Nationwide pending home sales were down 17 percent annually in the week ending June 11. That compares to a 26.6 percent drop in San Diego County. There were markets that fell more than here: Providence, Rhode Island, down 30.8 percent; Portland, down 29.1 percent; Milwaukee, down 28.2 percent and Seattle, down 26.9 percent.

There is still plenty of demand, despite what the low sales numbers show. Mortgage-purchase applications were up 8 percent last week and Google searches for “homes for sale” were up 15 percent in a month.

A little more than a third of all homes nationally were off the market in two weeks. That compares to 64.7 percent in San Diego County.

Nationally the average sale-to-list price ratio was 99.9 percent, meaning homes are selling for exactly their asking price. It was slightly more than 100 percent in San Diego County, meaning most homes are going over the asking price.

Source: SDuniontribune by Phillip Molnar