#USA #California #Home Sales #C.A.R. #California Housing

California’s Housing Market Struggles in September

The California real estate market experienced a notable decline in home sales this September, as rising mortgage rates and affordability issues increasingly limited buyer activity. According to a report from the California Association of Realtors (C.A.R.), the state recorded a total of 260,410 closed sales of single-family homes in September. This reflects a 3.4% drop from 269,620 sales in August and a 6.5% decrease from 278,540 sales in the same month last year.

Statewide Trends

The median home price across California for September was $899,720, showing a slight decrease of 0.2% from August. However, this figure represents a 1.7% increase compared to September 2025. Despite this moderate annual growth, the housing market continues to struggle, remaining below the 300,000-unit benchmark for sales for the 48th consecutive month.

Mortgages have become more expensive, with the average 30-year fixed mortgage rate climbing to 6.86% in September from 6.67% in August and 6.35% a year earlier. This escalation in borrowing costs is likely to suppress demand further in the nearing months, especially as economic uncertainty looms.

Tamara Suminski, the President of C.A.R. and a Southern California broker, highlighted that "As we move into fall, the market feels a little less rushed, giving buyers more time to carefully consider their options." Although mortgage rates and affordability remain pressing challenges, the easing competition might provide well-prepared buyers with the flexibility to negotiate better terms and find homes that meet their needs rather than hastily submitting offers.

Regional Breakdown

Examining monthly and yearly sales trends across various regions of California reveals significant disparities. Most major regions experienced declines. Southern California saw the most dramatic annual drop at 9.1%, while the San Francisco Bay Area and Central Valley reported annual decreases of 3.1% and 2.5%, respectively. Conversely, the Central Coast stood out as the only region with a 4.4% increase in year-over-year sales.

Furthermore, some counties experienced substantial changes in sales activity. For instance, Trinity County demonstrated an impressive 60.0% increase in sales, while counties like Imperial and Siskiyou faced steep declines of 33.3%.

Price Stability Amidst Declining Demand

Even with the drop in buyer demand, the statewide median price per square foot has remained stable, rising 1.4% from the previous month to $434. Notably, 35.9% of homes sold in September were priced over a million dollars, reversing previous downward trends and contributing to a stable median price despite the softer demand overall.

Jordan Levine, C.A.R.’s Senior Vice President and Chief Economist, noted, "September's decline in pending sales suggests that California could see further softening in closed transactions in the coming months." This forecast indicates a cautious outlook for the upcoming bustling fall season.

Inventory and Days on Market

Housing supply seemed to improve, as properties took longer to sell. The Unsold Inventory Index (UII) remained constant at 3.7 months, above the 3.6 months recorded last September. Active listings rose 2.7% from August, marking the first annual increase in eight months, mainly due to the seasonal slowdown in demand rather than a surge in new listings.

Moreover, the median time to sell a single-family home decreased slightly from 32 days in September 2025 to 29 days in September 2026, suggesting that while the market is moving slower overall, sales are completing more efficiently in some segments.

As the real estate landscape in California continues to evolve, potential buyers and sellers will need to stay informed and strategically navigate the complexities of current market conditions. The C.A.R.'s data provides insights crucial for understanding these challenging dynamics that are affecting the housing landscape across the state.