California’s housing market is expected to see steady growth in 2026 as economic conditions stabilize and mortgage rates gradually ease, according to industry analysts. After several years of volatility marked by rising interest rates, affordability challenges, and shifting migration patterns, experts believe the state’s real estate sector will enter a more balanced phase.
The California Association of Realtors (CAR) projects moderate increases in both sales volume and home prices, with growth driven by improving consumer confidence and sustained demand in key metropolitan areas such as Los Angeles, San Diego, and San Francisco Bay Area. While affordability remains a major issue for first-time buyers, falling mortgage rates could ease some pressure.
“Home sales in California are likely to experience consistent but modest growth in 2026,” said one housing economist. “We don’t expect a dramatic surge, but a healthier, more sustainable market where both buyers and sellers can benefit.”
Luxury real estate is expected to remain strong, fueled by international buyers and high-net-worth individuals seeking properties along California’s coastline. Meanwhile, suburban and inland regions could see increased demand as more families look for affordable options outside major urban centers.
Experts also highlight that government policies, such as incentives for first-time buyers and investments in housing supply, could influence the pace of growth. However, inventory shortages remain a challenge, with new construction lagging behind population needs.
Despite these hurdles, the overall outlook remains positive. Analysts emphasize that California’s strong economy, desirable climate, and global appeal will continue to make it one of the most competitive housing markets in the United States.
As 2026 approaches, many expect California to strike a balance between steady price appreciation and improved accessibility, offering opportunities for both buyers entering the market and homeowners looking to sell.