#United States #California #Mortgage Rates #Home Sales #California Housing

California Home Sales Rebound in August 2025

In August 2025, California's housing market demonstrated signs of recovery as existing single-family home sales increased slightly, fueled by a drop in mortgage rates and stabilization in home prices. As reported by the California Association of Realtors (C.A.R.), the seasonally adjusted annualized rate of closed sales reached 264,240, marking a 0.9% uptick compared to July 2025, although it represented a 0.2% decline from August 2024.

This improvement, however, is set against the backdrop of a market that has faced five consecutive months of year-over-year sales declines, indicating the challenges that continue to affect homebuyers and sellers alike. The August figures reflect what could be an ongoing recovery if recent trends persist, particularly as the mortgage rates fell to their lowest levels in a year.

Increased Demand Amid Lower Rates

One of the catalysts behind the slight resurgence in demand for homes can be attributed to a decrease in mortgage rates. This easing of rates has encouraged potential buyers who had previously been hesitant to re-enter the market. Pending sales surged by 8.3% from July, a promising sign of renewed interest among consumers, which has been somewhat suppressed in recent months by economic uncertainties and higher borrowing costs.

C.A.R. President Heather Ozur articulated the sentiment of cautious optimism in the market. “Many prospective homebuyers have been holding out for lower mortgage rates... the recent decline could prompt them to engage more actively in the housing market.” This theory is particularly supported by the growing number of pending sales, which recently posted a year-over-year increase of 0.2%—the first growth in nine months.

Stability in Home Prices

Along with increasing sales activity, the median home price statewide increased to $899,140 in August—up 1.7% from July and 1.2% from the previous year. This upward trend in prices over the last month plays a crucial role in restoring confidence in the market, as buyers feel more secure in their investments. The increase comes after three months of prior declines, hinting at a potential price recovery. Experts observe that the market has reached a precarious balance, with the inventory of homes stabilizing and fewer listings being drastically reduced in price.

C.A.R.'s Senior Vice President and Chief Economist, Jordan Levine, noted that “the uptick in the median price in August and a stabilization in the number of reduced-price listings last month indicates that the market appears to have found a short-term balance between supply and demand.” He emphasized that if mortgage rates maintain their current state or decline further, the positive trajectory of home prices could continue.

Regional Highlights

At the regional level, the Uneven Recovery of home sales was evident across various parts of California. The Far North region noted a sales increase of 2.9%, while the Central Coast registered a 1.6% uptick in home sales compared to last year. In stark contrast, the San Francisco Bay Area saw a sales decline of 4.1%, showing the varied dynamics of the local markets.

On a county-by-county basis, out of 53 counties tracked, 24 recorded year-over-year sales increases in August. Mariposa County led this charge with an impressive 81.8% growth compared to last year. However, there were cautionary tales too, with counties like Yuba seeing a staggering 35.3% year-over-year decline in sales, suggesting that local market conditions can vary significantly.

Supply and Inventory Insights

In terms of supply, the Unsold Inventory Index increased slightly, standing at 3.9 months in August, up from 3.7 months in July. This shift points to a gradual easing in housing demand, despite the aforementioned gains in sales. The overall active listings rose by 23.5% from the previous year, although growth has started to decelerate, indicating potential seasonal trends as the market enters the fourth quarter of 2025.

With the median days on the market for single-family homes rising to 31 days in August—up from 22 days one year prior—sellers may need to adjust their strategies in the face of shifting consumer behaviors.

Conclusion

Overall, while California's housing market still faces challenges, August 2025 showcased moderate improvements in home sales and prices—a glimmer of hope for industry stakeholders. As mortgage rates show signs of stabilization, experts suggest that the latter parts of the year may present opportunities for potential buyers and sellers alike, promising a more active real estate scene ahead. With further monitoring of economic indicators and market behavior, we may yet see a turn in tides for California's housing market in the upcoming months.