Interest rates have been climbing with various factors at play, but probably most affected by the markets increasing fear of a U.S. debt default. The current headline in the WSJ reads, “House Republicans See Progress in Debt-Ceiling Talks,” so maybe, hopefully, we’ll soon see a turnaround in this situation before negative economic impacts deepen and multiply.

 

 

Q1 2023 Comparative CA County & U.S. City median house prices:  Provides greater context to the home affordability issue. The CA County prices are from CAR, which sometimes differ somewhat from MLS calculations.

 

 

On May 18th, the U.S. Census released their new county population estimates. These 2 charts below calculate number and percentage changes from April 2020 (pre-pandemic effect) to July 1, 2022 for Bay Area Counties + Sacramento. (These are estimates and other sources of demographic data sometimes disagree regarding population changes over the period.) We should assume reasonable margins of error in all these numbers.

 

 

Actual Census numbers: Population losses in the first year of the pandemic (approx. April 2020 to July 1, 2021) decelerated in the 2nd year in the counties with the biggest numeric losses – 96% of SF’s loss occurred in the first year, 75% of Santa Clara’s, 72% of Alameda’s, 71% of San Mateo’s  – but the picture varied in the counties with much smaller losses.

 

 

A look at housing construction volumes. The chart insert gives numbers behind the rapid increase in ADU permitting and construction, an interesting development in recent years, which typically adds inventory to the rental market, as well as adding value to the property.

 

 

The Consumer Confidence Index dropped in May after climbing in the first 3 months of the year. (It hit its lowest point since 1978 in mid-summer 2022, when inflation peaked.)

 

 

The mortgage delinquency rate continues to decline and was close to historic lows in Q1 2023:

 

 

Long-term view of Fed rate changes and interventions: There have been mixed messages from Fed Reserve board members regarding whether there will be another rate increase in June or not.