Buying a home in California? What experts predict for the 2026 housing market
Are you thinking about buying a home in California?
As the housing market moves into 2026, real estate experts predict several factors will shape what’s next for buyers, sellers and investors.
This includes mortgage rates, home prices and the number of houses for sale, according to the National Association of Realtors.
While challenges remain for buyers and sellers, housing experts say the market is beginning to stabilize.
According to the California Association of Realtors, both home sales and the median price are projected to inch upward.
From home prices to mortgage rates and housing inventory, here’s what experts predict for California’s housing market in 2026:
Will California home prices increase in 2026?
Home prices in California are expected to rise in 2026, according to real estate experts — but the increase will be modest compared to that in past years.
Heather Ozur, president of the California Association of Realtors, said slower price growth could create more opportunities for buyers who were sidelined by the market in 2025.
“For would-be buyers who sat out the competitive market during the past couple of years, that means more opportunities as inventory increases moderately and lending conditions become more favorable,” Ozur said in a news release from Sept. 17.
The National Association of Realtors also expects price growth to remain mild.
Lawrence Yun, chief economist for the National Association of Realtors, said home prices are likely to increase between 2% and 3%.
“Generally, wage growth will be above that,” Yun said in a Monday, Jan. 5, news release. “So, it’s a year where people’s income begins to rise a little faster than consumer price inflation and home prices — and this is a welcoming development.”
As of December, the statewide median home price was $852,680, according to the California Association of Realtors’ latest data.
According to the Realtors group, the statewide median home price will climb to a record of $905,000 in 2026.
Where can I find most affordable home prices in California?
According to the latest report from the California Association of Realtors, the state’s most affordable homes can primarily be found in Northern California and the Central Valley.
Based on the November home sales and price report released Dec. 16, these 10 counties had median home prices below the statewide average of $852,680:
1. Lassen County — Median sold price of existing single-family homes was $185,000
2. Trinity County — $260,130
3. Lake County — $335,000
4. Siskiyou County — $345,000
5. Kings County — $365,000
6. Glenn County — $370,000
7. Tehama County — $370,000
8. Tulare County — $372,950
9. Shasta County — $380,000
10. Tuolumne County — $392,500
What’s the 2026 forecast for mortgage rates?
Mortgage rates are expected to ease in 2026, offering some relief to homebuyers, according to the California Association of Realtors and the National Association of Realtors.
“The past couple of years have been frustrating because of elevated mortgage rates, but things will be much better to achieve that American dream of ownership in 2026 — with more inventory choices and mortgage rates falling,” Yun said.
Lower rates could help offset the increasing home prices, the National Association of Realtors said.
The California Association of Realtors also predicts that, as economic uncertainty fades and rates begin to decline more steadily, the housing market should improve throughout 2026.
As of Friday, Jan. 9, the average 30-year fixed mortgage rate in California was about 5.9%, according to Zillow.
The California Association of Realtors expects rates to stay below 6% in 2026.
Will housing inventory increase in 2026?
Mortgage rates aren’t the only factor shaping the 2026 housing market.
Inventory also plays a big role, according to the National Association of Realtors.
“Inventory is another component that needs to cooperate,” Nadia Evangelou, a senior economist with the National Association of Realtors, said. “Inventory is rising — it’s higher than a year ago — but if more buyers come back, we’re going to need even more homes available for sale.”
Currently, inventory levels are about 20% higher than 2025, giving buyers more choices, the Realtors Group reported on Monday, Jan. 5.
Zillow’s latest data from Nov. 30 shows there are 91,644 homes for sale in California.
With more homes on the market and slightly improved affordability, first-time homebuyers will have better opportunities in 2026, the National Association of Realtors said.
