Home sales in southern Calif. drop to 7-year low

ome sales in southern California, the region with some of the priciest neighborhoods in the U.S., dropped to the lowest level for any June in the past seven years as higher borrowing costs discouraged buying.

A total of 29,237 new and existing homes were sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, down 17.5 percent from a year earlier, La Jolla, California-based DataQuick Information Systems said Tuesday in a statement. Last month's sales were the lowest for a June since 1999, when 29,076 homes were sold.

Real estate is cooling across the U.S. as mortgage rates rose to a four-year high this month. Confidence among homebuilders dropped this month to the lowest level in more than 14 years, according to the National Association of Home Builders/Wells Fargo index, and shares of builders including Centex Corp. have fallen an average of 39 percent this year.

In Southern California, the median price for a home was a record $493,000 last month, up 1.6 percent from May and 6 percent from a year earlier. The year-over-year increase was the smallest since May 2000, and home sales posted the seventh straight month of annual declines.

"We view this as the normal winding down of a real estate cycle, where declining demand gradually erodes price growth until it halts or reverses," DataQuick President Marshall Prentice said in the statement.

The typical monthly mortgage payment Southern California homebuyers committed to paying was $2,437 last month, up from $2,376 in May and $2,021 a year earlier. Adjusted for inflation, current payments are about 8.4 percent higher than at the peak of the previous real estate cycle, in 1989, DataQuick said.

Some of Southern California's most expensive homes are in neighborhoods such as Newport Beach, Beverly Hills and Malibu.