California State Tax Revenues Increase by 13.8% in 2Q15

The U.S. Census Bureau released figures for second quarter state and local tax collections by state and type of tax. At $274.4 billion, total state tax revenues collected across all fifty states (excluding Washington, DC) were up by 5.8% in the second quarter of 2015 compared with the same period in 2014 – a reflection of stronger economic growth and the improving health of state and local finances. In California, tax revenues were up by 13.8% to $51.4 billion in the second quarter, an increase of nearly $6.3 billion.

All three of California’s largest tax revenue categories recorded significant increases in collections during the second quarter. General sales tax revenues rose by 6.0% to $10.3 billion, but were outpaced by the national increase of 9.2%. Personal income tax revenues were $28.7 billion in the second quarter, an increase of 20.6% over the year. Nationally, personal income taxes were up by 13.6%. The strong gain is indicative of healthy job growth and rising household incomes.

California’s corporations paid $4.7 billion in incomes taxes during the second quarter, an increase of 12.5% compared with the same period a year ago. Corporate tax payments tend to be very volatile – in the first quarter of this year, corporate tax revenues decline by 2.5% -- but they count for a relatively small share of California’s “Big Three” revenue sources. Across the U.S., corporate incomes taxes were up by 5.5%.

Other noteworthy changes include a 7.8% uptick in property tax revenues, the result of rising home prices, and a decline of 2.9% in motor fuel sales taxes stemming from increased vehicle fuel efficiency and the rising use of hybrid or electric cars.

Altogether, sales and personal income taxes made up 66% of state revenues nationwide. California relies more heavily on these two revenue sources compared to other states. Sales and personal income taxes regularly contribute about 75% of total tax revenues received in a given quarter.

Source:    http://www.census.gov/govs/www/qtax.html

Strong Income Gains Boost Consumer Spending in August

Total personal income in the U.S. increased in August by 0.3% on a nominal basis. Wages and salaries, the largest component of personal income, rose by a robust 0.5%. Additionally, the increase in July personal income was revised up from 0.4% to 0.5%, and the wages and salaries component was revised up from an increase of 0.5% to 0.6%.

Real disposable income (adjusted for taxes and inflation) increased by 0.3%, while real personal consumption expenditures moved up by 0.4%. With the increase in spending outpacing real income growth, the saving rate edged down from 4.7% in July to 4.6% in August. Spending on durable goods increased by 1.2%, while spending on nondurable goods and services rose by 0.6% and 0.3% respectively.

On a year-to-year basis, incomes and spending moved higher in August:

• Real disposable income growth slowed slightly in August, rising by 3.2% versus 3.3% in July
• Real personal consumption expenditures were up by 3.2%,  
• Growth in real spending on goods (4.0%) outpaced spending on services (2.8%) although in dollar terms, Americans spend more than two times as much on services as they do goods.

Consumer prices were unchanged over the month in August but were up by 0.3% over the year. Excluding food and energy, prices advanced by 1.3%. The current low-inflation environment has helped support consumer spending in the absence of stronger hourly wage gains.

Although personal income growth was a little lower in August than expected, consumer spending is supporting economic growth. Households are feeling more confident about the economy and their personal financial outlook. Consumers are using credit more freely while household wealth has reached record levels buoyed by financial market returns and increases in property values. 

Source:  http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

SoCal Home Sales and Median Prices in August

Southern California home sales increased over the year in August, rising by 8.0% to 21,352 units (new and resale houses and condominiums). Over the month, sales fell by 12.0% and were 18.0% below the average August price going back to 1988. The sales slowdown was seen across all home-types, counties and price ranges. While a July-to-August slowdown is typical, it may also reflect tighter inventories and/or declining affordability. Nonetheless, home sales have risen on a year-over-year basis for seven consecutive months, the longest stretch of gains since late 2012 into early 2013. Additionally, the decline between July and August followed two months of the highest home sales since August 2006.

The median price across Southern California increased by 4.3% over the year to $438,000 but was unchanged from July. The median price has now risen for 41 consecutive months on a year-over-year basis and was the second highest (coming in just behind June 2015), since October 2007 when it was $445,000. In Orange County, the median price is only 5.4% below its prerecession peak level. Home sales of $500,000 or more accounted for 40.5% of all sales in August, up from 38.2% a year ago.

Throughout 2015, Southern California’s housing market has continued to make progress. Contributing to improvements over the past year have been stronger job growth, rising household income, increases in homeowners’ equity, fewer homeowners in financial distress and low mortgage interest rates. Low inventories, declining affordability and the availability of credit continue to be constraints but anticipated wage gains and higher household incomes should drive accelerated housing market activity over the next couple of years.

 Source:  http://www.corelogic.com/solutions/configurable-real-estate-data-reports.aspx/

U.S. Travel and Tourism Spending Strengthens in 2Q15

Real spending on travel and tourism was up by 6.5% (seasonally adjusted annualized rate) during the second quarter of 2015. This followed an increase of 2.2% in the first quarter. In comparison, real gross domestic product increased by 3.7% during the second quarter. The Bureau of Economic Analysis tracks the travel and tourism industry in the United States because it is an important source of jobs and economic activity, particularly here in Southern California. Additionally, foreign visitors traveling to the U.S. are an important source of export revenue.

Total direct spending on travel-related goods and services was $827.2 billion during the second quarter of this year compared with $814.2 billion in the previous quarter. Spending on passenger air transportation jumped by 11.6%; food services and drinking places expenditures increased by 7.2%; recreation and entertainment was up by 3.5% and shopping increased by 4.3%.

Overall prices for travel and tourism goods and services were up by 1.0% in the second quarter after declining by 8.7% during the first quarter. Prices for recreation, entertainment and shopping were collectively up by 1.5%, while prices at restaurants rose by 2.5%. The largest jump in prices was for non-air transportation (car rentals, gasoline), which increased by 16.5%. These gains were largely offset by lower prices for air travel (-9.7%) and accommodations (-7.7%).

The travel and tourism industry has also been a source of steady job growth since the second quarter of 2010. Direct employment in this sector increased by 1.6% during the second quarter of 2015 after expanding by 2.1% in the previous quarter. With the exception of accommodations, where employment fell by 1.0%, jobs increased across the industry. Transportation employment increased by 2.8%, food services payrolls expanded by 2.3%; tourism-related jobs in recreation, entertainment and shopping increased by 2.8%. During the second quarter, over 5.6 million workers were employed in the U.S. travel and tourism industry, which equated to about 4% of all nonfarm payroll jobs in the U.S. 

Source: http://www.bea.gov/newsreleases/industry/tourism/tournewsrelease.htm

Retail Sales a Mixed Bag in August

U.S. retail and foods services sales in August were up by 0.2% over the month, while the figure for July was revised up slightly from 0.6% to 0.7%. Core retail sales, which do not include autos, gasoline and building supply centers, rose by 0.5%.

Sales were stronger in most major retail categories last month. American consumers spent more of their income on new cars, appliances and electronic gadgets. Households increased spending at grocery and big box stores. They  also ate out more and shopped for clothes and back-to-school supplies. Meanwhile, consumers spent less at home furnishings stores, home and garden supply centers, and gasoline stations.

On a year-over-year basis, total retail sales in August were up by 2.2%. Most major sectors are reporting year-over-year gains with the exception of electronics and appliance stores (-2.5%), department stores (-1.9%) and gasoline stations (-17.2%), primarily because of declining prices (retail sales are not adjusted for prices changes). The biggest winners over the year have been restaurants and bars (8.2%), nonstore retailers, primarily e-commerce (6.9%); the catch-all category sporting goods, hobby, book and music stores (6.1%); and motor vehicles (5.7%).

Retail sales in August were slightly below expectations, but the three-month annualized rate was up by more than five percent. Sustained gains in the labor market, lower gasoline prices, rising consumer credit and record levels of household wealth should continue to provide a lift for consumer spending, the major driver of U.S. economic growth.  

Source:  http://www.census.gov/retail/marts/www/marts_current.pdf

California Home Sales and Median Prices in August

The California Association of Realtors recently released their report on California existing home sales and median prices in August. The statewide median price last month was $493,420, up slightly (by 1.0%) compared with July and higher by 2.5% than the year ago figures. Despite more than three years of continuous price gains, the statewide median price is 17.1% below the peak reached in May 2007.

The number of single-family homes in California that closed escrow in August increased by 9.3% over the year to 431,800 units (seasonally adjusted annualized rate). Compared with July sales were down by 3.8%. Home sales in August were at their highest level since October 2012 and was the fifth straight month in which sales rose above 400,000 units.

Home prices are increasing at a healthier rate, meaning they have slowed from the breakneck pace that prevailed in 2013 and 2014 to something that more accurately reflects the fundamentals of housing demand: job and wage growth.  Still, much of the appreciation that is occurring statewide is being fueled by supply constraints in the Bay Area were the median price was up by 10.4% to $804,190, but sales were flat over the year. Elsewhere, sales are on the rise in the Inland Empire and Central Valley, where homes are both more affordable and available.

While momentum is building in California’s housing markets, higher mortgage interest rates and reduced affordability are creating an environment of uncertainty that may cause some potential buyers to take a step back from the market.

Below is a year-over-year summary of sales and price activity in Southern California by county. Although the statewide sales figures are seasonally adjusted, regional and county figures are not.

§  Los Angeles County:  unit sales increased by 4.4% over the year in August, while the median price rose by 3.7% to $492,360.

§  Orange County: sales edged higher by 1.0% and the median price was up by 2.2% to $714,550

§  Riverside County:  sales of existing homes rose by 6.5% and the median price increased by 5.8% to $337,110.

§  San Bernardino County:  sales climbed by 19.2% in August with the median price rising by 10.5% to $230,530.

§  San Diego County:  unit sales were up by 11.3% and the median price rose by 9.1% to $557,400.

§  Ventura County:  sales were up by 8.6% over the year while the median price rose by 3.0% to $620,150.

Source: http://www.car.org/newsstand/newsreleases/2015releases/august2015sales

August State and Local Employment Report

The Employment Development Department (EDD) released the state and local employment reports for the month of August. Total California nonfarm employment increased by 36,300 jobs over the month in seasonally adjusted (SA) terms.

The year-over-year change showed an increase 470,000 jobs (SA). This equated to growth rate of 3.0%, exceeding the August national increase of 2.1%. California’s private sector added 434,300 jobs (an increase of 3.3% over the year), while employment in the public sector rose by 1.6% (37,800).

Industry employment trends have been consistent for several months. Nine of the 11 super-sectors added jobs over the year to August: construction; trade, transportation and utilities; information; financial activities; professional and business services; educational and health services; leisure and hospitality; other services and government for a combined gain of 473,900 jobs. Professional and business services posted the largest gain on a numerical basis, adding 134,600 jobs (up 5.5%), while construction claimed the largest gain in percentage terms, increasing by 6.5% or 43,800 jobs.

There were two sectors that recorded a decline over the year in August. Mining and logging was down by 8.6%, a loss of 2,700 jobs; manufacturing employment dipped by 0.1% or 3,900 jobs.

California’s unemployment rate declined slightly from 6.2% in July to 6.1% in August and was down from the year ago rate of 7.4%. The civilian labor force was unchanged over the month but was up by 1.1% over the year. Over the last 12 months, 203,000 workers have joined California’s labor force bringing California’s labor force participation rate up to 62.4%. The national rate is 62.6%.

County highlights:

(Note: With the exception of the Los Angeles unemployment rate, county level numbers are not seasonally adjusted, which means there can be large month-to-month fluctuations in job counts. A truer picture of how local labor markets are faring is revealed by focusing on the year-over-year numbers. Annual trends “correct” for the seasonal factors that influence certain industry sectors over the course of the year.)

• In Los Angeles County, the seasonally adjusted unemployment rate was 6.9%, down from 7.2% in July and below the year ago rate of 8.1%. Total nonfarm employment increased by 7,900 jobs over the month  but was up over the year by 76,300 jobs, an increase of 1.8%.

• Educational and health services posted the largest year-over-year gain in employment in August with a net increase of 22,500 jobs.  The health care industry added 23,300 jobs, but a drop of 800 jobs in educational services reduced the overall industry gain.

• Also recording significant job gains were trade, transportation and utilities (17,100 jobs), and leisure and hospitality (16,800 jobs). Most of those jobs were concentrated in accommodation and food services.

• Two of the major industry sectors reported year-over-year declines in August.  Mining and logging lost 300 jobs, while manufacturing continued on its long-term trend decline with a loss of 4,700 jobs.

• In August, the unemployment rate in Orange County was 4.5%, down from 4.7% in July and below the year-ago figure of 5.8%. Nonfarm payroll jobs increased by by 2,200 over the month and were up by 48,500 over the year (an increase of 3.2%).

• In the Riverside-San Bernardino area, the unemployment rate in August was 6.8% compared with 7.1% in July and well below the year ago rate of 8.6%. The Inland Empire gained 6,100 nonfarm payroll jobs over the month and 44,500 over the year. This represented an increase of 3.5%.

• In Ventura County, the unemployment rate was 5.8%, down from the year ago estimate of 7.0%. Total nonfarm employment was unchanged over the month but was up over the year by 2,500 jobs (0.9%).

Summary: California led the nation once again with 36,300 jobs added last month and 470,000 over the year. Los Angeles led the Southern California region with 76,300 jobs added in yearly terms, while the Inland Empire and Orange County led the region in percentage terms with gains of 3.4% and 3.2% respectively.

(Kimberly Ritter-Martinez)

Sources:  http://www.labormarketinfo.edd.ca.gov/

California Financial Report for August

The State Controller’s office has released the August cash report for the State’s General Fund. Two months into the fiscal year (2015-2016), total receipts were up by 15.1% to $14.2 billion compared with the same period last year. Total disbursements ($17.9 billion) were down by 21.4% over the same period, but still exceeded cash receipts by $3.7 billion. As of August 31, the state’s cash balance stood at -$1.1 billion.

Total revenues (receipts from taxes, licenses, fees or investment earnings) were up by 15.0% to $13.9 billion compared with the first two months of the previous fiscal year. So far this year, the state’s “big three” revenue sources have met or exceeded expectations laid out in the 2015-16 budget that was finalized just two months ago.

• Personal income taxes increased by 7.8% to $8.6 billion, beating expectations by $159.3 million or 1.9%
• Corporate income taxes edged up by 0.8% to $450.2 million, pushing past the forecasted level by 8.3%
• Revenues from sales and use taxes were up by 24.2% to $3.9 billion, running marginally ahead of projections (0.3%).

The schedule of cash disbursements in the Controller’s report showed that expenditures on Local K-12 Education were $3.7 billion during the first two months of the fiscal year, down sharply from the $8.8 billion disbursed last year. Expenditures for Community Colleges dropped by 23.5% to $821.5 million. The UC and CSU systems got off to a better start – disbursements were up by 13.0% to $1.1 billion compared with the first two months of the previous fiscal year. Contributions to CalSTRS (the state teacher’s pension fund) increased by 57.% to $332.1 million.

Spending for the Department of Corrections dipped by 0.2% to $1.7 billion, while outlays for Health and Human Services plunged by nearly half to $537.4 million. The amount the state paid to service its debt obligation was also down, falling by 12.6% to $262.3 million.

Since the state does not pay its bills or take in revenues at an even pace over the course of the year, year-to-date comparisons so early in the fiscal year can make for some confusing headlines, but based on current budget projections, this was a pretty good report card for the state. So far this fiscal year, General Fund receipts are running 5.0% of Department of Finance projections, while disbursements have come in 3.6% below expectations. 

As of August 31, the General Fund had $29.8 billion in unused borrowable resources against $1.1 billion in outstanding loans, which are composed entirely of internal borrowing. The General Fund is the source of most state spending and may borrow from other funds to even out variability in revenue and disbursement patterns. At $29.8 billion, the State’s available borrowable resources were 10.1% higher than was anticipated when the budget was signed. Unlike past years, the Controller believes that because of the state’s improved fiscal position, internal borrowing will be sufficient to met cash flow needs without having to issue revenue anticipation notes. 

Sources:  http://www.sco.ca.gov/eo_pressrel.html

Consumer Credit Increases by $19.1 Billion in July

Total consumer credit outstanding increased by 6.7% ($19.1 billion) over the month in July to $3.45 trillion (seasonally adjusted, annualized rate). In addition, consumer credit in June was revised significantly upward from a gain of $20.7 billion to $27.0 billion, which was the largest monthly gain recorded since 2010. Over the 12 months ending in July, total non-mortgage consumer debt was up by 6.8%.

Both revolving and non-revolving debt posted healthy gains last month. Non-revolving debt, which is composed mainly of auto and student loans, increased by 7.0% or by $14.8 billion. Over the year ending in July, non-revolving debt was up by 7.9% to $2.54 trillion.

Revolving debt, primarily spending on credit cards, rose by 5.7% ($4.0 billion) to nearly $915 billion. On a year-over-year basis, revolving debt has increased by 3.9%, but remains 10.5% below peak levels reached before the recession.

Low interest rates and rising home values are providing the encouragement consumers need to borrow for big ticket purchases. As long as employment and wage growth continues, consumer borrowing should continue to post solid gains. One thing to keep an eye on is that in the absence of stronger wages gains, the share of consumer credit to disposable income continues to creep up, hitting 25.8% in July (28.3% in real terms). So far, households appear to be managing their debt. According to the Federal Reserve’s Quarterly Report on Household Debt and Credit (August 2015), auto loan and credit card delinquencies have remained stable but student loan delinquencies are on the rise (from 11.1% 1q15 to 11.5% 2q15).

Source:  http://www.federalreserve.gov/releases/g19/current/default.htm

U.S. Light Vehicle Sales Rise to 17.7 Million Unit Pace

In August, U.S. light vehicle sales were up by 2.9% over the year to 17.7 million units (seasonally adjusted annualized rate). This was the fastest pace of sales since July 2005. On a per unit volume basis, 1.58 million light vehicles were sold last month, a slight decline (-0.5%) compared with year ago levels. That’s not so bad though when one considers there was one less selling day this August compared with last year and the Labor Day weekend fell in September this year.

Sales momentum is solidly on the side of light trucks, especially cross over utility vehicles and full-size pickup trucks. Sales increased by 11.3% over the year in August to 10.2 million units and accounted for 57.5% of the light vehicles sales mix. This was the highest share of truck sales recorded since June 2005.

• Sales of domestic trucks increased by 6.9% over the year to 8.2 million units
• Foreign light truck sales, which comprise about 20% of the light truck market, surged by 34.2% to 2.0 million units
• Compared with July, sales of pick-ups, SUVs and crossovers were up by 3.4%

Total passenger car sales, including foreign and domestic models, fell by 6.6% over the year to 7.5 million units.

• Sales of domestic autos were down by 6.6% over the year to 5.6 million units,
• Sales of foreign passenger cars declined by 6.7% to 1.9 million units
• Compared with July, total passenger car sales were off by 1.1%

Sales of medium-heavy truck have maintained a strong pace, rising by 10.4% over the year in August to 476,000 vehicles. Since these heavier trucks are used by firms to haul freight and make deliveries, an increase in demand for these vehicles is an indication of stronger business activity.

Reflecting a healthy market for buyers and sellers, both incentives and transaction prices rose in August. Momentum in the automotive industry is expected to carry forward through the rest of the year, bolstered by moderating gasoline prices and positive news regarding economic growth and job creation. It’s looking likely that auto sales will exceed expectations this year, pushing past calendar-year projections of 17.1 million units to 17.2.

Source:  www.bea.gov

U.S. Labor Market Still on Track

The U.S. Labor Market Report covering the national employment situation in August showed a gain of 173,000 nonfarm jobs. The unemployment rate fell to 5.1% and the average hourly wage rose by eight cents to $25.09. Over the year, average hourly earnings were up by 2.2%.

The employer payroll survey reported that total nonfarm employment in the United States increased by 173,000 jobs in August. This was somewhat below expectations, but does not signify a departure from the overall trend of strong employment growth. The private sector contributed 143,000 jobs to the August increase while the public sector added 30,000. Softening the blow of  last month’s lower job count were upward revisions to the June and July figures that showed an additional 44,000 jobs added than previously reported.  Over the past three months, job gains have averaged 221,000 per month.

On a year-to-year (YTY) basis, U.S. employment expanded by 2.92 million jobs, an increase of 2.1%. Every major industry sector added jobs over the year with the exception of mining and logging. This sector includes the oil and gas extraction industries, which have been negatively affected by low energy prices. However, employment declines were also recorded in other types of mining, particularly coal and support activities related to the mining sector. Overall, employment in mining and logging declined by 8.9% or 80,000 jobs over the year.

The fastest growing private sectors in YTY percentage terms were professional and technical services (3.6%, or 303,000 jobs); construction (3.6%, 219,000 jobs); administrative and waste services (3.3%, 284,4000 jobs); health care services (3.1%, 564,100 jobs); and growing at a rate 3.0% each, leisure and hospitality (439,000 jobs) and transportation and warehousing (140,900 jobs).

New record high levels of employment were reached last month in the following super-sectors: trade, transportation and utilities; professional and business services; education and health; leisure and hospitality; and other services (these are mainly jobs in repair and maintenance, personal and laundry services, and membership organizations).

In addition to the employer payroll survey, the monthly employment report includes a separate household survey that covers self-employed workers (whose businesses are unincorporated), unpaid family workers, agricultural workers and private household workers who are excluded from the establishment survey. The household survey showed an increase of 196,000 jobs over the month.

The unemployment rate is also derived from the household survey. In August the unemployment rate fell to 5.1% from 5.3% in July. The year ago rate was 6.1%. The labor force participation rate was unchanged over the month and remains at a 38-year low. The more comprehensive U-6 unemployment rate was 10.3% last month, down from the year ago rate of 12.0%. The U-6 unemployment rate counts part-time workers who would prefer full-time work and individuals who would like a job but have given up the search. Of the approximately 94 million Americans not counted in the labor force, about six million indicate they would like to have a job.  Although the headline unemployment rate is very close to what might be considered full employment, the elevated U-6 rate is an indication of ongoing slack in the labor market, which may be one reason why upward pressure on wages has been slow to build.

Improvements in the labor market have also helped bring down the share of workers who have been jobless for 27 weeks or more. In August, that share was 27.7%, which was up from July (25.8%), but down from 31.2% a year ago. The long-run average is 25.0%. Over the past 12 months, the number of long-term unemployed persons has fallen by 779,000.

Summary: The pace of job growth in August may have been a little slower compared to recent months, but a broader survey of labor market indicators combine to reinforce our narrative of continuing improvement in the labor market and the general economy.

Source:  http://www.bls.gov/news.release/pdf/empsit.pdf

Consumer Spending Rises with Increase in Wage Income

Total personal income in the U.S. increased in July by 0.4% on a nominal basis for the fourth consecutive month. Wages and salaries rose by a robust 0.5%, (mainly because more people were working as opposed to earning higher wages). Total wages in goods producing industries were up by 0.7% over the month, while wages in services industries advanced by 0.5%. Services account for just over 67% of the total wage bill in the U.S. with the remainder about evenly split between goods producing industries and the public sector. Government transfers (social security, Medicare, Medicaid, unemployment insurance, veterans’ benefits) also increased by 0.5% in July.

Real disposable income (adjusted for taxes and inflation) increased by 0.4% while real personal consumption expenditures moved up by 0.2%. With incomes rising faster than spending, the saving rate increased to 4.9% in July from 4.7% in June. Spending on durable goods was up by 1.3%, while spending on nondurable goods and services both edged up by 0.1%.

• On a year-to-year basis, incomes and spending moved higher in July:

• Real disposable income growth accelerated in July, rising by 3.3% versus 3.0% in June

• Real personal consumption expenditures were up by 3.2%, Growth in real spending on goods (3.9%) outpaced spending on services (2.8%) although in dollar terms, Americans spend more than two times as much on services as they do goods.

Consumer prices were little changed over the month in July, inching up by 0.1%. Over the year ending in July, consumer price inflation increased by just 0.3%. The current low inflation environment has helped support consumer spending in the absence of stronger hourly wage gains.

The outlook for consumer spending for the rest of the year is fairly optimistic. Supported by employment growth, solid gains in disposable income and low inflation, real consumer spending should increase by about 3.0% in the third and fourth quarters of this year. 
Source: http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

California Home Sales and Median Prices in July

The California Association of Realtors recently released their report on California existing home sales and median prices in July. The statewide median price in July was $488,260, down by 0.3% from June but up by 5.4% from a year earlier. Despite sustained increases over the last two years, the statewide median is still $100,000 shy of the previous peak of $595,500 that was established in May 2007. By comparison, a separate release from the National Association of Realtors reported that the national median price in July was $234,000 (for all homes).

Statewide, the number of single-family homes that closed escrow in July increased by 12.7% over the year to 449,530 units (seasonally adjusted, annualized rate) and was up by 2.7% from June. Home sales in July reached their highest level since October 2012 and was the fourth straight month in which sales rose above 400,000 units.

With home prices continuing to rise and mortgage interest rates edging up ahead of the expected rate increase by the Federal Reserve, housing affordability is becoming more and more of a concern. The interest rate in July on a 30-year fixed-mortgage averaged 4.05%, up from 3.98% in June, and only slightly below the year ago rate of 4.13%. According to the CAR home affordability index, only 30% of California households could afford to purchase a median priced home during the second quarter of this year, down from 34% during the first quarter. The comparable number for the U.S. as a whole is 57%. Affordability peaked in California during this cycle at 56% in the second quarter of 2012.  If demand continues to outstrip supply, especially in metro areas with strong job growth, declining affordability will become even more acute.

Below is a year-over-year summary of sales and price activity in Southern California by county. Although the statewide sales figures are seasonally adjusted, regional and county figures are not.

§  Los Angeles County:  unit sales increased by 14.2% over the year in July, while the median price rose by 5.4% to $486,310.

§  Orange County: a jump in sales of 21.3% was accompanied by an increase in the median price of 3.9% to $722,170.

§  Riverside County:  sales of existing homes rose by 14.4% and the median price increased by 5.8% to $338,510.

§  San Bernardino County:  sales increased by 16.7% in July with the median price rising by 5.9% to $230,180.

§  San Diego County:  unit sales climbed by 25.1% and the median price rose by 7.6% to $622,580.

§  Ventura County:  sales were up by 23.3% over the year while the median price moved up by 6.3% to $622,580.

Source: http://www.car.org/newsstand/newsreleases/2015releases/july2015sales?view=Standard