California Home Sales Decline in July as Median Prices Fall Below $900,000

Overview

In July 2026, California's residential real estate market experienced a notable decline in home sales, marking a retreat following a robust rebound in June. The California Association of REALTORS® (C.A.R.) reported that home sales settled at a seasonally adjusted annualized rate of 263,170, reflecting a 6.0% decrease from June's revised total of 279,880. Despite this downturn, the sales figures still represent an increase of 1.1% when compared to July 2025, continuing a trend of surpassing year-ago levels for the fourth consecutive month.

Statewide Home Prices

For the first time in four months, the statewide median home price dropped below the $900,000 threshold, decreasing by 1.9% from June's $904,640 to $887,680 in July. Despite this monthly decline, the median price saw a marginal increase of 0.3% compared to a year earlier, indicating that while the market is softening, there are still signs of resilience. The decline in prices may be attributed to a broader shift in the sales mix, with fewer transactions occurring in the luxury segment above the million-dollar mark.

Influencing Factors

C.A.R. President Tamara Suminski noted that the slowdown in sales coincided with rising mortgage rates, which reached a 12-month peak during the month, creating headwinds for affordability and buyer demand. Even with the recent moderation in rates, many potential buyers are still grappling with high borrowing costs. However, July also brought improvements in housing supply, providing buyers with more options during a traditionally slower season.

Regional Sales Performance

Regionally, four out of California's five major areas reported higher year-over-year sales in July, with the Central Coast exhibiting the strongest performance at an impressive 11.1% increase. The Central Valley also saw a 2.9% rise, while sales in the Far North increased slightly by 0.8%. In contrast, Southern California and the San Francisco Bay Area showed little change from the previous year.

At the county level, 28 out of 53 counties tracked by C.A.R. experienced year-over-year sales increases, with Merced County leading the pack at a staggering 39.5% increase. However, several counties faced double-digit declines, reflecting the complexities and localized nature of the state's housing dynamics.

Inventory and Days on Market

The housing inventory relaxed slightly compared to the previous month, with the Unsold Inventory Index (UII) rising to 3.4 months in July. This is an increase from 3.1 months in June but remains below the 3.7 months seen in July 2025. The total number of active listings, while rising 2.9% from June, was still down 9.3% compared to the previous year, indicating persistent constraints in housing supply across many regions.

The median time to sell a single-family home in California was recorded at 26 days, a slight improvement from the 28 days noted in July 2025. Conversely, the statewide sales-price-to-list-price ratio was at 99.3%, pointing to a competitive market for buyers and sellers alike.

Conclusion

Despite the challenges posed by increased financial market volatility and elevated mortgage rates, the California housing market demonstrated both resilience and complexity in July. While sales dipped, the persistent slight increase in year-over-year metrics showcases that some segments continue to thrive. As the real estate market transitions into the latter half of 2026, potential buyers and industry professionals will need to navigate the ongoing economic landscape and evolving housing conditions carefully.