California’s housing market is showing renewed activity as mortgage rates ease, giving buyers more purchasing power after a prolonged slowdown. Recent industry indicators point to a rise in home sales across the state, with both urban centers and suburban areas seeing increased interest.
Analysts attribute the rebound to a gradual decline in average mortgage rates following a period of sharp increases. As borrowing costs fall, many prospective buyers who had paused their search are re-entering the market, boosting transaction volume in Los Angeles, San Diego, and the San Francisco Bay Area.
“Lower mortgage rates are creating momentum,” said a senior housing analyst. “We’re seeing a measurable uptick in buyer activity, though the market is still far from uniformly affordable.”
Affordability remains a critical issue: housing prices in many coastal metros are still high, challenging first-time buyers. However, inland and suburban markets are seeing relatively stronger gains in sales as buyers seek more affordable alternatives outside major city centers.
The luxury segment continues to perform well, supported by international buyers and high-net-worth investors targeting coastal properties. At the same time, industry groups urge increased housing supply and targeted policy measures to ease long-term affordability pressures.
While inventory shortages persist, experts are cautiously optimistic: if mortgage rates continue to moderate, the current sales momentum may extend into 2026, creating a more balanced environment for buyers and sellers across California.