California Housing Market Outlook for 2026: What Buyers & Sellers Should Expect

What can Californians expect from the housing market in 2026, and how should buyers and sellers prepare for what’s ahead?

As we move into 2026, the California real estate landscape is poised for modest yet meaningful shifts. After several years of tight conditions and elevated costs, forecasts suggest gradual improvement in sales activity, home price growth, and affordability. Whether you’re planning to buy, sell, or evaluate your investment options, understanding these trends will help you make informed decisions.

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Sales Growth: A Modest Recovery

According to the California Association of REALTORS® (C.A.R.) 2026 forecast, existing single-family home sales are expected to increase about 2% in 2026, rising from roughly 269,000 units (projected for 2025) to around 274,400 homes sold next year. car.org

This uptick reflects a mild rebound after a relatively flat market in recent years. The forecast also anticipates housing supply improving modestly, with more active listings becoming available as economic conditions stabilize. The Almanac

Home Prices: Rising, But Slowly

California’s median home price is projected to continue its upward trend, albeit at a slower pace than the explosive growth of the past decade. C.A.R. forecasts median home prices to increase by about 3.6% in 2026, reaching an estimated $905,000. car.org

This price growth would mark a steady, not sharp, rise, offering a less frenetic market compared to prior years. For buyers and sellers alike, that means opportunities without extreme price volatility.

Affordability: Small Improvements Ahead

One key focus for 2026 is housing affordability. After years of constrained buying power due to high prices and mortgage rates, C.A.R. projects that California’s housing affordability index will rise to about 18% in 2026, up from 16% in 2024. The Almanac

In practical terms, this means a slightly larger share of households may be able to afford a median-priced home next year, which could draw more buyers off the sidelines.

Mortgage Rates: Expected to Ease

A cornerstone of the 2026 outlook is expected declining mortgage rates. Forecasts suggest the average 30-year fixed rate could drift closer to around 6%, down from approximate averages of 6.6% in 2025. The Almanac

Lower mortgage rates, even modest declines, can make monthly payments more manageable and unlock demand from buyers who previously delayed entry due to high borrowing costs.

Inventory & Buyer Options

While inventory remains a long-term challenge in California, forecasts anticipate improvements with more active listings coming online as the market steadies. Even a 10% rise in active inventory can offer greater choice, easing bidding pressure and enhancing negotiation power for serious buyers. The Almanac

What This Means for Buyers in 2026

For aspiring homeowners:
✔️ More listings and slightly improved affordability offer renewed opportunities.
✔️ Lower mortgage rates could make ownership more accessible.
✔️ Strategic offers, backed by pre-approval and a readiness to act, remain key.

Advice: Look beyond short-term price movements and focus on neighborhoods with long-term demand, quality schools, amenities, and lifestyle fit.

What This Means for Sellers in 2026

For sellers:
✔️ Stable price growth can help preserve and build equity.
✔️ Moderate competition early in the year may result in strong buyer interest.
✔️ Listing smartly and pricing competitively will be essential.

Advice: Sellers who prepare homes professionally and market effectively are likely to attract motivated buyers even in a gentle market.

Final Takeaway

The 2026 California housing market is shaping up as a year of measured growth and stabilization rather than dramatic swings. With modest increases in sales, gradual price appreciation, improving affordability, and easing financing costs, the market could offer smoother paths for both buyers and sellers.

Whether you’re taking your first step into homeownership, considering selling, or evaluating real estate as an investment, understanding these dynamics will help you plan with confidence.

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Take Action Today

Call Cyndi today at 661-510-5516 to get personalized insights and strategic guidance on navigating the California housing market in 2026.

As your Broker-Associate and REALTOR®, I help buyers and sellers across Valencia, Castaic, Canyon Country, Newhall, Saugus, Stevenson Ranch, Santa Clarita, the San Fernando Valley, Los Angeles, Burbank, Glendale, and beyond understand market trends, time their moves, and achieve their real estate goals in any season.