Southern California house payments soar record 40% in a year – Orange County Register

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“Payment Pulse” deals with the reality of Southern California homebuying finances — it’s really about the monthly check to the lender, not the headline-grabbing median sales price.

Buzz: A record-breaking 40% surge in Southern California house payments has helped slow homebuying to the lowest sales count for any May since 2011 — minus pandemic-iced 2020.

Source: My trusty spreadsheet looked at the frustrating monetary mix of higher home prices (using the monthly median from DQNews) and rising mortgage rates (average 30-year fixed-rate deals from Freddie Mac). We track a hypothetical monthly house home-loan payment a buyer paying the median price — assuming a 20% downpayment, without property taxes, association dues or insurance.

Rate watch: The three-month average 30-year loan for May was 4.79% vs. 4.3% the previous month and 3.03% a year earlier. That rate pop crushed a borrower’s buying power. In one month it fell 5.6% and in a year it dropped 19%. It’s the second-largest 12-month drop since 1988.

The pain

May’s estimated mortgage payments for the region soared to an all-time high of $3,188 on the record-tying $760,000 median.

In one month, the payment jumped $178 — that’s an extra 5.9%. In a year, payments rose $918 or 40%. (Please note the median price, by itself, is up 13% over 12 months.)

And do not forget that this math assumes a $152,000 downpayment — that’s 20% — a financial burden that’s grown by $18,000 in a year.

Locally speaking

The spreadsheet found some painful math within each of the counties, too, with all of May’s estimated house payments setting news record highs  …

Los Angeles: It takes a $3,607 payment to get the $860,000 median home. In the month, that payment’s up $181 or 5.3% higher. In a year, it’s up $982 or 37% as the median rose 11% over 12 months. And that 20% down payment is $172,000 — up $17,000 in a year.

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