Southern California house payments soar record 40% in a year to $3,188

“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.

Orange: $4,423 payment on a record-breaking $1.055 million median. In the month, that’s up $264 or 6.4% higher, and in a year it’s up $1,391 or 46%. The median price is up 18% over 12 months. And that 20% down is $210,900 — up $31,900 in a year.

Riverside: $2,510 payment on the peak $598,500 median. In the month, up $173 or 7.4% higher. Year’s rise? $810 or 48%. Median? up 19% over 12 months. And 20% down is $119,700 — up $19,300 in a year.

San Bernardino: $2,181 payment on the peak $520,000 median. In the month, up $123 or 6% higher. Year’s rise? $718 or 49%. Median? up 20% over 12 months. And 20% down is $104,000 — up $17,600 in a year.

San Diego: $3,565 payment on the peak $850,000 median. In the month, up $238 or 7.2% higher. Year’s rise? $1,109 or 45%. Median? up 17% over 12 months. And 20% down is $170,000 — up $25,000 in a year.

Ventura: $3,331 payment on the $794,250 median. In the month, up $111 or 3.5% higher. Year’s rise? $960 or 40%. Median? up 13% over 12 months. And 20% down is $158,850 — up $18,850 in a year.

Bottom line

Ponder these soaring costs in a historical context and the extreme pressure they’re exerting on house hunters.

Regionally, the year’s estimated house payment jump —  40% — is the largest since 1988. May’s jump was also No. 1 in Orange, Riverside, San Diego and Ventura counties. San Bernardino’s jump was No. 2 and Los Angeles’ was No. 5.

Those kinds of cost hikes make the 16% drop in Southern California sales in the past year not very surprising. It was the 58th biggest 12-month decline since 1988 (or it’s been worse only 14% of the time.)

The 12-month decline in purchases, by county: Los Angeles (off 16%), Orange (off 24%), Riverside (off 12%), San Bernardino (off 9%), San Diego (off 18%), and Ventura (off 19%).

Also, the 5% decrease in purchases from April was a rarity — since 1988, sales have fallen in this 30-day period only 18% of the time. A typical May sees a 5.4% sales increase from April.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]