CA mortgage rates rise amid Iran war. What can homebuyers expect to pay?
Are you thinking about buying a home in California?
According to the California Association of Realtors’ latest home sales and price report, the Golden State’s housing market showed signs of improvement in June.
Home sales climbed to their highest level in six months and home prices eased slightly from May’s record high.
However, mortgage rates continue to stand in the way for many potential homebuyers.
The California Association of Realtors said renewed tensions between Iran and the United States have fueled concerns about higher energy prices and inflation, putting pressure on the housing market.
“The recent escalation of conflict in the Middle East has added renewed upward pressure on mortgage rates, which could weigh on affordability and create additional headwinds for housing demand as the summer buying season unfolds,” Jordan Levine, the California Association of Realtors’ senior vice president and chief economist, said in the report.
Here’s what California homebuyers can expect to pay:
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What are current mortgage rates in California?
Mortgage rates remain well above what many housing experts had hoped to see this year.
Earlier forecasts from the California Association of Realtors projected rates would stay below 6% in 2026.
Instead, global economic uncertainty — including the war in Iran — have pushed mortgage rates passed 6%.
According to the California Association of Realtors, the average rate for a 30-year fixed mortgage climbed to 6.13% in April and 6.63% in May. Rates briefly dipped to around 6.5% in June as Middle East tensions eased.
As the conflict intensifies again, rates have begun to climb once more.
According to Zillow, the average 30-year fixed mortgage rate in California was about 6.63% as of Thursday, July 16.
The California Association of Realtors said continued uncertainty could "push mortgage rates higher and create new headwinds for housing demand as the summer buying season continues.”
Are California home prices rising or decreasing?
According to the California Association of Realtors’ latest housing report, the statewide median home price fell to $904,640 in June.
That is a 2.8% drop from May’s 'record-breaking price’ of $930,260 but 0.4% higher than June 2025.
Meanwhile, existing single-family home sales rose to a seasonally adjusted annualized rate of 279,880 in June — up 4.1% from May and up 6% from June 2025.
“California’s housing market ended the first half of the year on stronger footing, with home sales reaching their highest level in six months despite elevated mortgage rates and ongoing affordability challenges,” California Association of Realtors President Tamara Suminski said.
Where can I find the most affordable home prices in California?
As the statewide median home price slowly drops, buyers can still find houses for as low as $285,000 in California.
According to the California Association of Realtors, the most affordable home prices in the state can primarily be found in Northern California.
Based on the June 2026 Home Sales and Price Report released Thursday, these 10 counties had median home prices below the statewide median of $904,640:
- Lassen County — $285,000
- Lake County — $306,250
- Glenn County — $347,750
- Trinity County — $352,480
- Siskiyou County — $365,000
- Tehama County — $380,000
- Shasta County — $385,000
- Tulare County — $400,000
- Kings County — $401,500
- Tuolumne County — $409,000
“As more buyers adjust to current market conditions and inventory of homes for sale continues to improve, we are encouraged that increased consumer confidence could support housing demand through the remainder of 2026,” Suminski said.
Where do homebuyers pay highest home prices in California?
According to the California Association of Realtors, the Bay Area continues to home some of the highest housing costs in the state, with the median price for a single-family home reaching about $1.4 million in June.
Here’s where homebuyers can expect to pay the most expensive prices in California:
- San Mateo County — $2,310,000
- San Francisco County — $2,128,000
- Santa Clara County — $1,950,000
- Marin County — $1,775,000
- Orange County — $1,490,000
What are housing costs like in my California county?
Find the full list of home prices by county on the California Association of Realtors website.
