California pending home sales in July underperformed for the fourth straight month, even as the share of equity home sales continued to improve, according to a California Association of REALTORS® (C.A.R.) report. The month-to-month drop appears consistent with seasonal trends, the REALTOR® group's report states.
California pending home sales were down 2.3 percent in July, as C.A.R.'s Pending Home Sales Index (PHSI) fell from 107 in June to 104.5, based on signed contracts. Pending sales were down 9.2 percent from the 115.1 index recorded in July 2013.
Pending home sales are forward-looking indicators of future home sales activity. In California, pending sales have been down year to year since October 2012, but the drop in July was smaller than the average in the last six months, said C.A.R.
"Interest rates are very low right now and as inventory continues to improve and prices stabilize, sales should improve. There's a lot of buyer interest out there and we expect the market to have more activity in the coming months," said David Tonna, president of the Silicon Valley Association of REALTORS®.
The 30-year, fixed-mortgage interest rate in July averaged a low of 4.13 percent, compared with 4.16 percent in June and 4.37 percent in July 2013, according to Freddie Mac. Adjustable-mortgage interest rates were also ultra-low in July, averaging 2.39 percent, down from 2.40 percent in June and 2.66 percent in July 2013.
Meanwhile, the share of equity sales continued upward, accounting for 90.6 percent of all home sales in July, up from 90.3 percent in June. Non-distressed home sales have been rising steadily again since the beginning of this year. Equity sales made up 82.8 percent of sales in July 2013.
The combined share of all distressed property sales dropped further in July from 9.7 percent in June to 9.4 percent. Twenty-one of the 41 reporting counties showed a month-to-month decrease in the share of distressed sales, with 20 of the counties recording in the single-digits. The July share of distressed sales in San Mateo and Santa Clara counties was just 2 percent and 3 percent, respectively.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.