Housing tracker: SoCal home prices continue to break records

Southern California home prices rose to yet another all-time high in July, but there are signs values will grow more modestly from here on out.

The average home price in the six-county region was $876,865 last month, up 0.2% from June and nearly 7% from a year earlier, according to data from Zillow. It was the fifth straight month values hit a record.

In Los Angeles County, the average home now costs $892,166.

Economists and real estate agents say prices are rising despite high interest rates because there are too few homes for sale. However, some experts, citing the mismatch between incomes and prices, say home values should start to climb less than they have been.

That may already be happening.

The nearly 7% annual price increase in July was down from a 9% gain in April and the lowest since December.

Helping to moderate price growth is a housing shortage that, while not going away, is getting slightly less bad.

In recent months, the number of homes listed for sale has steadily grown. Real estate agents say home owners who once balked at giving up their ultralow mortgage rates from the pandemic and prior are increasingly choosing to move, deciding a larger home is more important than low borrowing costs.

In July, the number of homes on the market rose in all six counties from the prior year, ranging from a 20% gain in Orange County to 44% in San Diego County. In Los Angeles County, inventory climbed 28%.

Prospective buyers have received some additional good news lately. Last week, mortgage rates dropped to their lowest level in more than a year, hitting 6.47%, according to Freddie Mac. A week earlier, rates averaged 6.73% and were above 7% in May.

The drop immediately makes homes more affordable, but rates are still more than double what they were during the pandemic. Home prices are much higher as well.

Some experts don’t expect home prices to decline in the near future unless there’s a recession. That’s because while inventory is improving, it’s still low historically. Prices, however, should climb more slowly, giving incomes a chance to catch up.

Explore home prices and rents for July

Use the tables below to search for home sale prices and apartment rental prices by city, neighborhood and county.

Rental prices in Southern California

In the last year, asking rents for apartments in many parts of Southern California have ticked down.

Experts say the trend is driven by a rising number of vacancies, which have forced some landlords to accept less in rent. Vacancies have risen because apartment supply is expanding and demand has fallen as consumers worry about the economy and inflation.

Additionally, the large millennial generation is increasingly aging into homeownership, as the smaller Generation Z enters the apartment market.

Prospective renters shouldn’t get too excited, however. Rent is still extremely high.

In July, the median rent for vacant units of all sizes across Los Angeles County was $2,089, down 1.2% from a year earlier but 9% more than in July 2019, according to data from Apartment List.