“Crystal Ball” helps decipher numerous forecasts that ponder the future ups and downs of the economy.It could be another rollercoaster ride for California home values as one forecast calls for price dips reversing to a 7.3% gain over the next 12 months.My trusty spreadsheet reviewed the June report for CoreLogic’s home-price indexes, looking at what happened to values in 12 big markets and what might come next.
This turnabout can be largely tied to plummeting affordability on the heels of Federal Reserve rate hikes. The central bank morphed in early 2022 from a home-price pumper – using historically cheap money to revive a coronavirus-chilled economy – to a party pooper, rapidly raising interest rates to cool an overheated economy.
So while mid-2023’s pricey mortgages slashed the homebuying pace to unfathomable lows, a limited supply of homes for sale has propped up values. That supply shortfall prompted CoreLogic to forecast a significant California price gain through June 2024, with increases projected for all 12 markets.Here’s how the forecast breaks down projected gain among the state’s big housing markets, ranked by the size of forecasted increases …8% gain next 12 months vs. the past year’s 6.9% decrease.7.4% gain next 12 months vs. the past year’s 1.8% decrease.6.8% gain next 12 months vs. the past year’s 3.4% decrease.6.4% gain next 12 months vs.
Then let’s guesstimate that California incomes will increase 4% in the next 12 months. To keep the current rock-bottom affordability levels stable, mortgage rates would have to dip to 6.4%. They run nearly 7% today.Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at
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