According to the California Association of Realtors (C.A.R.), the housing market in California is projected to bounce back modestly in 2026 following a slower 2025. Home sales are expected to rise by approximately 2%, while median home prices are forecasted to increase about 3.6%. The median price in 2025 is set around $873,900, and C.A.R. predicts it could reach $905,000 in 2026.
Affordability is slowly improving. Mortgage rates are expected to gradually fall from around 6.6% to 6.0%, which may reduce how much income buyers need to qualify for a home loan—especially in high-cost areas. The housing affordability index is projected to inch up slightly (from ~17% in 2025 to ~18% in 2026), though many households will still find homes out of reach under current conditions.
On the supply side, inventory is likely to increase nearly 10%, bringing more homes to market and helping buyers who’ve been waiting on the sidelines. Sellers may see more competition but will benefit from a stabilized market: fewer sharp swings in price and more predictable demand.
? What This Means For You
- Buyers: With modest improvements around the corner—lower mortgage rates, slightly more inventory—2026 could be an advantageous time to buy. You’ll likely face less competition and fairer terms.
- Sellers: Stability is the name of the game. Pricing your home properly and getting it in front of the right buyers will be more important than ever.
- Investors: Opportunities may expand as demand rises and as homes are priced more realistically relative to what buyers can afford.
?? What’s your strategy
Thinking about making your move—buying, selling, or investing? Let’s talk strategy.
Reach out today so we can align your goals with what’s likely coming in 2026.
Email: John@jnjres.com | Phone: (909) 224-2091