Is 2026 the year buyers catch a break? California housing forecast says yes

CALIFORNIA – The California Association of REALTORS (C.A.R.) says 2026 could bring a modest rebound in both home sales and prices — a shift many buyers and sellers have been waiting for.

According to the group’s new forecast, sales of single-family homes are expected to tick up about 2% next year, reaching roughly 274,400 units.

That’s a slight improvement from the 269,000 projected in 2025, but it marks a reversal from the flat or declining sales that have frustrated the market in recent years.

Prices are also projected to climb, though not at the pace of past booms. The median home price is expected to rise 3.6% to $905,000 in 2026. By comparison, 2025 is on track for only a 1% increase, pushing the median to $873,900.

Perhaps the most encouraging sign for buyers: affordability is set to improve, at least slightly.

C.A.R. expects about 18% of households will be able to purchase a median-priced home in 2026, up from 16% in 2024. It’s still a low number, but for some families, even a small shift could open doors.

Easing mortgage rates are behind much of the optimism

C.A.R. predicts the average 30-year fixed mortgage will fall to around 6% in 2026, down from 6.6% this year. More inventory is also expected, with active listings climbing nearly 10% as sellers who’ve been sitting on the sidelines decide it’s time to test the market.

However, job growth is expected to slow, with nonfarm employment growing just 0.3% in 2026.

The state’s unemployment rate is also projected to creep up to 5.8%. Add in rising home insurance costs and economic uncertainty tied to global trade, and housing demand could still be fragile.

Slight opportunity for buyers

For buyers, 2026 may not bring a dramatic drop in home prices — but it could mean more breathing room. Slower price growth, slightly lower mortgage rates, and a bit more inventory could tip the balance toward opportunity.

For sellers, the story may be different. While home values are expected to rise, the pace of growth is cooling. That means sellers may need to adjust expectations as buyers regain leverage.