Navigating Market Uncertainty: Why the Real Estate Market May Be Slowing and What’s Next

Hey there, friends! I am here to break down what’s happening in the markets and why things feel a bit shaky right now. Let’s talk real estate, credit card debt, California’s changing social trends, and why uncertainty is keeping buyers on the sidelines.

The Real Estate Market: Why the Slowdown?

Three weeks ago, I mentioned that mortgage rates were at their lowest in six months. A week later? Bam! We hit the highest rates in six months. Interest rates and stocks are struggling, and both are very volatile. One client told me they can’t buy now because “stocks are too low.” But let’s be real - how many folks are pulling money from stocks, paying 30% capital gains tax, and throwing it into real estate? Not many!

So, what’s driving the latest slowdown? High interest rates and rising insurance costs have been around for quite some time, but they’re not the whole story. The real culprit? Uncertainty. People are afraid of what they don’t know - will rates keep climbing? Will home prices drop? Will the economy tank? This fear is freezing buyers, even though California’s housing market fundamentals remain strong. Inventory’s up slightly, but the affordability index is stuck at 16%, meaning only 16% of households can afford a median-priced home. Prices are stubborn, with Santa Clarita’s median home value at $907,285 and a 7.61% annual appreciation rate.

Then there’s the tariff talk. Last week, the Consumer Price Index (CPI) came in lower than expected, which in a normal world would’ve sent rates tumbling. But tariffs trumped CPI. Nearly half of Americans worry tariffs will worsen their credit card debt, and this uncertainty is keeping rates high and markets jittery. In a non-tariff world, we’d be seeing rate relief by now!

Looking forward, I’m optimistic. Mortgage rates are expected to stabilize later in 2025, and increased inventory could ease competition. Double-digit price growth is over (for now), but single-digit appreciation is sustainable. California’s economy is resilient, especially in tech-heavy Bay Area and lifestyle-driven coastal areas. It’ll turn, folks - hang tight!

Credit Card Debt: California’s Spending Spree

Let’s talk money - or rather, debt. California households are carrying an average of $13,416 in credit card debt, up $342 since January 2024, growing faster than any other state. Americans owe $1.2 trillion in credit card debt, with average balances at $6,730 per household in 2024. In California, high living costs and incomes drive bigger balances - $57,170 total household debt (including cards, cars, and student loans).

Where does Santa Clarita rank? It’s #1 in the U.S. for credit card debt per household, with an eye-popping $22,753. Chula Vista is close at $20,920; other California cities like Fontana ($18,843) and Rancho Cucamonga ($18,549) are the top five. But here’s the twist: Santa Clarita’s median household income of $118,489 means residents can often manage this debt better than lower-income areas. It’s not always distress - it’s financial flexibility, with folks juggling multiple cards and low delinquency rates.

Still, 22% average credit card APRs are brutal. Paying only the minimum on a $6,380 balance (national average) takes 22 years and costs $3,017 in interest. Californians, especially millennials, feel the pinch, with 7.6% of millennial borrowers 30+ days late on payments. High rent, gas, and groceries make folks lean on cards.

I met friends at Art’s Deli last week - guess how much a sandwich with one side costs? Nope, higher! Try again! If you guessed $27, you’re spot on. A hot dog? $21. Everything’s expensive, and it’s tempting to charge it!

Are We Spending on the Right Things?

We all love nice things. I sent my adult kids to Stagecoach this weekend - don’t ask what it cost! I’m grateful I can afford it, but the average family? They’re charging festivals, vacations, and dining out to credit cards. 47% of cardholders say emergency expenses (medical, car, home) caused their debt, but 28% blame day-to-day costs like groceries, and 11% point to retail splurges. We’ve got money for the little things, but are they necessary?

This brings me to priorities. Clients need to focus on big wins like homeownership. A house in Santa Clarita appreciates at 6.77% annually over 10 years, building wealth while you sleep. Compare that to credit card interest eating your savings. 53% of cardholders have been in debt for a year or more. It’s time to cut back, pay down balances, and invest in a home that’ll outlast festival tickets.

California Marriage Rates: Are People Settling Down Less?

Is the slowdown tied to lifestyle changes? Are people settling down less? Let’s look at California marriage rates. In 1960, the marriage rate was 8.9 per 1,000 people; by 2022, it dropped to 5.2 per 1,000. That’s a 41.6% decline. Nationally, the trend is similar - 8.6 in 1960 to 6.0 in 2022. Why? Economic pressures, shifting priorities, and delayed milestones. Millennials (28 - 43) face student debt and high housing costs, making marriage less urgent. In 2019, only 55% of Californians aged 18 - 34 were married or cohabiting, down from 65% in 1990.

Fewer marriages mean fewer couples buying homes together. First-time buyers are key to the market, but demand softens if folks aren’t pairing up. Still, single buyers and non-traditional households are stepping up, and we’re here to help them navigate FHA or VA loans with low down payments.

The Path Forward: Focus on What Matters

The market’s uncertain, rates are high, and credit card debt’s a beast, but homeownership is still the best long-term investment. California’s housing shortage keeps prices elevated, and Santa Clarita’s 92.61% appreciation over 10 years proves real estate builds wealth. Rates will stabilize, and tariffs won’t spook markets forever. Potential buyers need to focus on the future, and too many of them grew up with a cell phone in their hands and want immediate gratification now! Saving and thinking long-term may be a thing of the past, but they will all jump in when the markets are better!

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

The roller coaster is taking rates slightly lower today after an awful Thursday and Monday! We need a couple of good days to get back on track! Hoping we finish the week strong!

Loan Programs

• We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the 6’s.
• Conventional loans up to $806,500 are in the 6s.
• High Balance Loans from $806,501 to $1,209,750 are also in the 6’s and 7’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s ++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No Ratio Loans require 30% down.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:** – Nothing new!

**Bad News for Condos***

Pallisades – Stevenson Ranch – Insurance and reserves are the issue there!

Annadale Condos– Agoura CA – Roof repairs are needed, but there is a lack of reserves and insurance issues!

The full state of California naughty list has been added to MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

Have a great day, and an even better tomorrow! Please call me when you have a client who needs to borrow!