NEWS NUGGETS

Los Angeles had the fourth highest total of foreclosure starts, 700.

1.4%

> Typical home values grew by 1.4% from April to May, the strongest monthly appreciation since last June.

Nationwide, one in every 3,967 housing units had a foreclosure filing in May. A total of 35,196 U.S. properties had foreclosure filings - default notices, scheduled auctions or bank repossessions - up 7% from a month ago and up 14% from a year ago.

Where Homebuyers Are Finding Affordability

sales were down 18.1%, new inventory was down 29.2%, and total inventory was down 25.1%.

Nationally, typical home values grew by 1.4% from April to May, the strongest monthly appreciation since last June. That's a few degrees cooler than the previous two springs, but hotter than in 2018 or 2019. The typical home value is $346,856 — up 0.9% over last May and up 3.4% from a recent low in January.

A new loan on a home priced at the typical value in the U.S. would feature monthly mortgage payments just shy of $1,800. That monthly payment is 22% higher than last year, double that of May 2019, and the second highest on record after October 2022.

The flow of new listings was down 23% year over year in May — a milder drop than in April, but nearly equal to that of March. Sales measured by newly pending listings climbed 9.5% from April, shrinking the year-over-year decline to 18% in May and marking steady improvement since March.

California Has 2nd Highest Number Of Foreclosure Starts

California had 2,451 foreclosure starts in May, the second highest total behind only Florida (2,901), according to ATTOM in a report released June 8.

Of those major metropolitan areas with populations greater than 1 million,

American Home Shield looked at data from Freddie Mac to see which major metropolitan areas are experiencing an outflow of homebuyers, as well as where they are going and how much they could save on monthly mortgage payments. Five California metros are in the top 20. Here’s a look at where homebuyers are going.

No. 19 Sacramento: Estimated mortgage payment: $3,000. Top affordable destination: Yuba City ($2,400 estimated mortgage payment)

Many Sacramento homebuyers have their eyes set on suburban Yuba City as they look to trade high costs of living for a city where most residents can afford to own their homes. Sacramento politicians are facing pushback as they attempt to add homeless shelters.

No. 13 San Diego: Estimated mortgage payment: $3,800. Top affordable destination: Riverside, ($2,900 estimated mortgage payment)

The so-called Inland Empire, centered on San Bernardino and Riverside, has been luring millennials looking for affordable housing for at least the past decade—a trend that only intensified with the pandemic's effects on the cost of living in Los Angeles County.

No. 12 San Jose: Estimated mortgage payment: $4,700. Top affordable destination: San Francisco ($4,200 estimated mortgage payment).

California home prices may feel like a totally different ball game for much of the country, but high-earning San Jose homeowners are cashing in and moving into San Francisco, which is nearly equally as expensive. San Francisco has experienced slower housing growth than comparable cities - including Austin, Texas, and Seattle - over the past decade due to permitting fewer new builds, according to a San Francisco Chronicle analysis published in 2022.

No. 4 San Francisco: Estimated mortgage payment: $4,200. Top affordable destination: Sacramento ($3,000 estimated mortgage payment)

Like many other business centers, San Francisco, the gateway to the Pacific, is currently undergoing a post-pandemic shift in culture as offices sit vacant. Retailers and other businesses have begun to exit the city, citing a rise in shoplifting. Homebuyers are finding a booming arts scene, a wide array of festivals, and lower housing costs in nearby Sacramento.

No. 2 Los Angeles: Estimated mortgage payment: $3,800. Top affordable destination: Riverside ($2,900 estimated mortgage payment).

Like those in San Diego, Los Angelenos continue to be swayed by the promise of an easier cost of living in the Inland Empire, which comprises Riverside and San Bernardino. Riverside, in particular, is where children can attend above-average schools compared with the rest of the state, and most residents there can afford to own their homes, according to Niche.

California Has 2nd Largest Home Equity Loss

California homeowners had the second largest annual equity loss - $59,600 - in the first quarter of this year, according to the CoreLogic Homeowner Equity Insights report released June 8. Only Washington ($74,300) had a bigger equity loss.

Nationally, CoreLogic analysis shows U.S. homeowners with mortgages (roughly 63% of all properties) saw their equity decrease by a total of $108.4 billion since the first quarter of 2022, a loss of 0.7% year over year.

Despite these declines, home equity remains solid, with the number of underwater properties unchanged since the fourth quarter of 2022. And years of rapid appreciation in Los Angeles and San Francisco, which have negative equity shares of 0.9%, is keeping homeowners in these metros in good standing.

Residential Housing Activity Slows Further: Fed Reserve Bank of San Francisco

Activity in residential real estate slowed further over the reporting period of April through early May, the Federal Reserve Bank of San Francisco wrote for its report in The Beige Book, released May 31.

Contacts across the district reported stable demand for single-family homes, although high mortgage rates restrained prices. Inventories of existing singlefamily homes were low, and owners appeared hesitant to forego their existing low-rate mortgages, the Fed noted in its report. One contact in Southern California noted that new multifamily construction put downward pressure on rents in some areas. Despite reported improvement in the availability and cost of materials, construction of new homes was flat to down as developers responded to higher financing costs, the report said.

Economic activity in the Twelfth District expanded somewhat during the April through mid-May reporting period. Employment levels were stable and overall labor market conditions remained tight, accompanied by wage increases that showed some signs of leveling off.

The Twelfth District covers the nine western states - Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, and Washingtonplus American Samoa, Guam, the Commonwealth of the Northern Mariana Islands.

Nationally, economic activity was little changed in April and early May. Residential real estate activity picked up in most of the 12 districts despite continued low inventories of homes for sale.

The Beige Book is a Federal Reserve System publication about current economic conditions across