Californians reluctant to buy homes or new cars

"The association estimates that California dealers will sell 1.79 million vehicles in 2025, a 2% increase from 2024, following a 1% decline in 2024. Politely, that's flat. Next, you see home sellers aren't faring much better. If current sales continue through the year's first eight months, 317,000 California residences are expected to be purchased in 2025. That would be down 2% in a year after a 5% increase in 2024."

"Prices go skyward. The typical new car price topped $50,000. And California is home to more high-priced ZIP codes than any other state. Additionally, interest rates are burdensome for consumers who typically finance these expensive purchases. A five-year car loan ran 7.9% at mid-year 2025, according to the Federal Reserve. That's up from 4.5% in 2022. Meanwhile, in mid-2025, rates on a 30-year mortgage reached 6.8%, according to Freddie Mac. That's up from 2.9% in 2020."

"Look, these kinds of major investments require shoppers to sense some economic stability. But consumer confidence has tumbled statewide as California's economic thinking collides with Trump administration policies. Hiring and pay raises have stalled. Overall inflation chips away at household budgets. Affordability is another challenge for both big-ticket purchases. Below par These 2025 California sales paces are well off recent highs. California vehicle sales this year run 12% below the 2.03 million sales level reached in both 2016 and 2017 during the pre-pandemic economic boom."

Vehicle purchases in California are essentially flat, with dealers estimated to sell 1.79 million vehicles in 2025, a 2% increase after a 1% decline in 2024. Home sales are weakening, with about 317,000 residences expected to be purchased in 2025, down 2% after a 5% rise in 2024. Consumer confidence has fallen amid political headwinds, stalled hiring and pay growth, and persistent inflation that reduces household budgets. Affordability is strained by rising prices—typical new car prices topped $50,000—and higher financing costs; five-year car loans averaged 7.9% mid-2025 and 30-year mortgages hit 6.8%.

Read at www.ocregister.com