by Lex Shan
California’s housing market reached a pivotal milestone in April 2024, with the statewide median home price hitting a new record. Yet, beneath this price surge lies a more cautious story—rising economic uncertainty, elevated mortgage rates, and softening consumer sentiment. In this month’s Bay Area Market Insights, we unpack what’s driving these mixed signals and what it all means for buyers, sellers, and industry professionals.
🏡 California Hits Record Median Price — But Growth Slows
California’s median home price surged to a record-breaking $910,160 in April, marking 22 consecutive months of year-over-year increases. However, the annual growth rate slowed to just 0.7%, the smallest since July 2023. Month-over-month, the increase was also milder than the 10-year seasonal average of 4%, signaling a possible shift toward price moderation in the coming months.
While prices may continue to rise seasonally, the softer April growth reflects growing market hesitations amid persistent economic concerns.
📉 Home Sales Retreat Amid Economic Jitters
Despite entering the spring homebuying season, California’s home sales declined in April, falling:
3.4% month-over-month
0.2% year-over-year
It was the second decline in four months, suggesting that elevated mortgage rates and economic uncertainty are taking a toll on buyer confidence. Pending sales also dropped for the fifth consecutive month. Year-to-date, sales remain slightly up by 1.4%, but the pace of growth is slowing—a trend that may continue if consumer sentiment doesn’t rebound.
💳 Consumer Spending Slows Despite Lower Inflation
Retail sales in April showed signs of consumer pullback:
Retail sales rose just 0.1%, a steep drop from 1.7% in March
Auto sales dipped 0.1%
Sporting goods fell 2.5%
Dining out remained resilient, rising 1.2%
Though inflation dropped to a four-year low, uncertainty around trade policy and new tariffs is causing consumers to tighten their wallets. As negotiations continue, spending patterns may stay muted, which could have ripple effects on housing demand.
📊 Inflation Hits Four-Year Low—But Will It Last?
In better news, the Consumer Price Index (CPI) showed inflation cooling:
Headline CPI up 2.3% YoY (vs. 2.4% expected)
Core CPI up 2.8%, unchanged from March
Used vehicle prices fell for the second month in a row, while new vehicle prices remained flat. Shelter costs rose 4.0% YoY, the smallest increase since November 2021. However, tariff-related inflation may still be looming as Q1 inventory stockpiling and pulled-forward spending may be delaying the full impact.
🏗️ Housing Starts Rebound, But Permits Signal Trouble Ahead
April brought a slight rebound in housing starts:
+1.6% month-over-month nationally
But single-family starts down 2.1% from March, and 12% YoY
More concerning is the drop in building permits:
Total permits down 4.7%
Single-family permits down 5.1%
In the Western U.S., housing starts dropped dramatically:
Total starts down 16.1%
Single-family starts down 18.7%
With builder confidence slipping due to waning demand, high material costs, and labor shortages, construction activity is expected to remain soft heading into summer.
🔍 What This Means for Bay Area Buyers & Sellers
Buyers: While prices are at historic highs, slower price growth and increased inventory in some markets may open up opportunities. Stay pre-approved and watch for potential rate adjustments.
Sellers: If you’re considering listing, the seasonal upswing in pricing could work in your favor, but don’t wait too long—buyer hesitation may increase if economic signals worsen.
Agents & Investors: Prepare for a mixed market. Focus on client education and realistic expectations as affordability and confidence continue to shape buyer behavior.
📅 Final Thoughts
April 2024 may have brought a new price milestone, but the market remains highly sensitive to broader economic trends. From softening home sales to slowing consumer spending and builder caution, signs point to a fragile housing landscape in the months ahead. Keep an eye on inflation, mortgage rates, and trade policy updates—they’ll be crucial in shaping how the rest of the season unfolds.
📬 Stay Informed
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