“Payment Pulse” deals with the budget-busting reality of Southern California homebuying finances. It’s really about the size of the monthly check to the lender, not the headline-grabbing median sales price.

Buzz: Homebuying chilled to the sixth-slowest June since 1988 as the typical Southern California homebuyer faced a record-breaking $3,311 payment — up 44% in a year.

Source: My trusty spreadsheet looked at what’s become a market-icing mix: The intersection of high home prices and rising mortgage rates. Using data from DQNews and Freddie Mac, we’ve generated a hypothetical typical monthly home-loan payment a buyer would get, assuming a 20% downpayment. The math does not account for property taxes, association dues or insurance.

Rate watch: The average 30-year rate in June averaged 5.24% over the past three months vs. 4.79% in May and 3% a year earlier. So, a house hunter’s borrowing power fell 5% in a month and 24% in a year.

The pain

Dreaming of living in a place you can call your own has gotten so pricey that house hunters are beginning to abandon their searches. Note that in June, 25% fewer home sales were made in Southern California compared with a year ago.

A key culprit is the Federal Reserve. The Central Bank is only beginning its battle against the highest inflation rate in four decades. It’s using a house hunter’s least-favorite weapon — interest-rate boosts. Just ponder the wannabe owner’s challenge: soaring rates coupled with high prices.

In one month, the region’s estimated payment rose $123, or 3.9% more. In a year, payments rose $1,021 or 45%. Please note that the median price, by itself, is up 10% over 12 months.

And do not forget this financing math assumes a house hunter has a $150,000 downpayment or 20%. This particular financial burden expanded by $14,200 in the past year.

Locally speaking

Let’s consider the data within the counties, which all hit record highs for a month’s estimated house payments …

Los Angeles: $3,796 payment on the $860,000 median. In the month, the payment is $189 or 5.3% higher. In a year, it’s up $1,132 or 42%. The median is up 9% over 12 months. And that 20% downpayment is now $172,000 — up $14,000. June sales were down 23% in a year.

Orange: $4,525 payment on the $1,025,000 median. In the month, $104 or 2.4% higher. Year’s rise? $1,489 or 49%. Median? up 14% over 12 months. And 20% down is $205,000 — up $25,000. Sales fell 34% in a year.

Riverside: $2,624 payment on the $594,500 median. In the month, $114 or 4.5% higher. Year’s rise? $904 or 53%. Median? up 17% over 12 months. And 20% down is $118,900 — up $16,900. Sales fell 21% in a year.

San Bernardino: $2,286 payment on the $517,750 median. In the month, $92 or 4.2% higher. Year’s rise? $791 or 53%. Median? up 17% over 12 months. And 20% down is $103,550 — up $14,950. Sales fell 20% in a year.

San Diego: $3,642 payment on the $825,000 median. In the month, $77 or 2.2% higher. Year’s rise? $1,116 or 44%. Median? up 10% over 12 months. And 20% down is $165,000 — up $15,200. Sales fell 32% in a year.

Ventura: $3,576 payment on the $810,000 median. In the month, $252 or 7.6% higher. Year’s rise? $1,095 or 44%. Median? up 10% over 12 months. And 20% down is $162,000 — up $14,900. Sales fell 21% in a year.

Bottom line

No matter how you slice pricing, homebuying costs look huge, even if you factor in the surging cost of living.

June was the 23rd priciest month for buyers in the six-county region dating to 1988, adjusting payments for inflation. That’s higher than 94% of all months.

By county, the inflation-adjusted impact in June: Los Angeles (ninth-priciest since 1988, or bigger than 98% of all months), Orange (No. 10 or 98%), Riverside (No. 33 or 92%), San Bernardino (No. 28 or 93%), San Diego (No. 9 or 98%), and Ventura (No. 59 or 86%).

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com.

Source: The Orange County Register