California home buyers have it tough. Veterans and active military using VA loans have it especially tough. That is in no small part due to rising interest rates and home prices. The climb is especially in counties such as San Diego, Sacramento, and San Bernardino.
The Van Brady report which publishes a variety of Veteran specific home buying data, including VA purchase transaction volume and the median prices paid by this niche of VA home buyers, has discovered unsettling data within its September reports.
VA Loan Production Declines Dramatically Between August and September
The simple fact is that when people cannot afford an asset, such as a house, then they won’t buy it. That is exactly what appears to be happening. Home affordability is challenging to accurately measure in any market. But the rear-view mirror look at how many Veterans are buying homes – this is irrefutable data.
In the six CA counties that the Van Brady report measures, there exists an across the board dramatic month-to-month reduction in sales volume from August to September 2018. The data above makes it clear that veterans did not buy this September at the same as last September. Somewhat similar broad statistics are being experienced in many corners of the state, according to the CA Association of Realtors.
There is a Ray of Light
However, data suggests there is hope in some markets. A local combination of price points and buyer profiles including income levels seem to be buoying markets such as Riverside County. In this market, VA purchase transaction volume in September 2018 has nearly mirrored August and even July.
298 VA buyers in Riverside county used their VA loan to buy in September vs. 304 in August and 292 in July. This stable volume was likely due to a high concentration of VA purchases in the Temecula Valley, including Murrieta, Menefee and the surrounding communities. This area still offers attractive price points for the thousands of enlisted members of the Marine Corps and Navy. That is mainly due to the fact that they still report for work on their respective bases. These bases boast 65,000 – 70,000 active servicemen, so this robust military employment is likely supporting the county’s VA purchase loan volume numbers. That is not the case in other parts of the state.
Regardless of what the future holds for our Veterans and active military families, it is clear that across the state, away from the mega-military bases, Veterans either can’t qualify for VA loans in the same volumes as they have in the past or perhaps they have just taken a step back to reassess their prospects.