The California housing market gained momentum in October 2025, with the strongest sales pace in eight months as home prices dipped. New data from the California Association of Realtors (C.A.R.) signals stabilization amid ongoing economic concerns and limited listings.
Home Sales Continue to Recover
According to C.A.R., sales of existing single-family homes reached a seasonally adjusted annualized rate of 282,590 transactions in October. The figure represents the number of homes that would change hands in a year if the pace in October were maintained. It also marks a 1.9% increase from September and a 4.1% rise compared with October 2024, when statewide sales sat at 271,370 homes.
While October’s improvement is notable—pushing sales to their highest point since February 2025—the market remains far below the activity levels seen before the pandemic-era cooldown. California has now logged 37 consecutive months with annualized home sales below the 300,000 benchmark, a sign of ongoing inventory challenges and affordability constraints.
Forward-looking indicators were mixed. Pending home sales, which track newly signed purchase contracts, edged up 0.8% year-over-year, marking the third consecutive annual gain. However, month-to-month activity declined 1.2%, a decrease C.A.R. attributes mostly to typical seasonal behavior as the market transitions into the slower winter period. County-level performance was divided: 26 counties recorded an annual increase in pending sales, while 24 posted declines.
C.A.R. President Tamara Suminski, a Southern California real estate broker who will serve the organization in 2026, noted that buyer interest has steadily increased through the fall. “California has seen three straight months of rising sales,” Suminski said. “Although mortgage rates have ticked up since late October, buyers remain engaged, and the market is offering more balance than we’ve seen in some time. Price growth has moderated to a healthier, more sustainable pace.”
Home Prices Slip Slightly from Last Year
October’s statewide median home price reached $886,960, a 0.4% increase from September’s figure of $883,640. The uptick goes against the state’s historical pattern, which typically sees median prices drift 1% to 2% lower during the fall months.
Compared with October 2024, however, prices fell 0.2%, marking the first annual decline since midsummer. Even with that modest drop, median prices remain close to record levels set earlier this year.
Economists say the mixed signals reflect ongoing uncertainty in the broader economy. Mortgage rates briefly eased to their lowest level in 12 months earlier in October, but began rising again as the Federal Reserve continued to signal a cautious stance amid the effects of the recent federal government shutdown.
C.A.R. Senior Vice President and Chief Economist Jordan Levine said the rate environment is likely to slow momentum as the year winds down. “We expect demand to cool somewhat as mortgage rates resume their upward trend,” Levine said. “California will probably finish 2025 with only a modest improvement in sales compared to last year.”
Regional Sales Trends Show Broad but Uneven Growth
Most major regions across the state saw higher sales activity than a year earlier, though the strength of gains varied widely.
- Far North counties posted the most robust performance, with sales climbing 18%, the only double-digit regional increase statewide.
- Southern California, which includes the state’s most populous counties, rose 5.6% year-over-year.
- The Central Valley posted a 4% increase.
- The San Francisco Bay Area gained 2.5%, reflecting gradual improvement after years of higher borrowing costs and outmigration pressures.
- The Central Coast was the lone region to record a drop in sales, slipping 1.5% from last year.
At the county level, sales figures showed even wider disparity. Out of 53 counties tracked:
- 34 counties recorded annual sales gains.
- 16 of those experienced double-digit increases.
Counties with the largest year-over-year surges included:
- Trinity County: +85.7%
- Lassen County: +58.3%
- Kings County: +52.9%
Meanwhile, 18 counties saw annual declines. Among those with the steepest drops were:
- San Benito County: -18.4%
- San Luis Obispo County: -15.2%
- Tehama County: -12%
Inventory Tightens as Listings Slow
Housing supply continued its usual downward trend heading into the fall. California’s Unsold Inventory Index—a measure of how long the current supply of homes would last at the current sales pace—fell from 3.6 months in September to 3.2 months in October. A lower index indicates tighter supply conditions.
Active listings were still higher than a year ago, rising 10.3%, but October’s increase was the smallest year-over-year growth since February 2024. Inventory growth has now slowed for six consecutive months, suggesting that sellers may be pulling back amid economic uncertainty.
Homes also stayed on the market longer than they did one year earlier. The median time on market rose to 32 days, compared with 25 days last October. Although this reflects a modest softening in buyer demand, C.A.R. noted that the market remains relatively competitive by historical standards.
Price Movements Vary Sharply by Region and County
Only two major regions saw annual increases in their median home prices:
- Central Coast: +7.9%
- Southern California: +1.1%
The regions with the largest yearly price declines included:
- Far North: -3.8%
- San Francisco Bay Area: -1.1%
- Central Valley: -0.2%
County-level price trends were equally mixed. 23 counties reported higher median prices than a year ago, led by:
- Santa Barbara County: +26.7%
- Trinity County: +22%
- Mono County: +18.6%
More than half of all counties recorded annual declines. The steepest drops included:
- Tuolumne County: -15.3%
- Lassen County: -11%
- Del Norte County: -9.9%
Additional Market Metrics
A variety of other measurements point to a state adjusting to shifting economic pressures:
- Sales-to-list-price ratio: 98.3%, down from 99.9% in October 2024, indicating buyers are negotiating slightly more room below the asking price.
- Median price per square foot: $431, compared with $442 a year earlier.
- Average 30-year fixed mortgage rate: 6.25% in October, down marginally from 6.43% last year, though rates have climbed since.
Outlook for 2026
California’s housing market is showing signs of stability. October’s data is reflecting firmer ground than earlier in the year. However, mortgage rate volatility, economic uncertainty, and ongoing inventory shortages remain critical factors that could shape market trends in the coming months.
Most economists expect the remainder of 2025 to bring slower activity, as is typical for the season. However, it comes with the potential for a steadier rebound in 2026 if borrowing costs moderate and inventory gains continue.
