California’s housing market is back and in such a big way! They did more than just show fresh signs of life as home sales across the state climbed to their strongest level since late 2022, offering cautious optimism that the market’s prolonged slowdown may be easing, according to new data from the California Association of Realtors.
Sales of existing single-family homes reached a seasonally adjusted annualized rate of 287,940 in November 2025, marking a 1.9% increase from October and a 2.6% rise compared with November 2024. It is the highest monthly pace California has recorded since September 2022, a period before sharply rising mortgage rates sidelined many buyers.
The annualized figure estimates how many homes would change hands in a full year if November’s sales tempo continued, while accounting for normal seasonal fluctuations. While not a prediction, it provides a snapshot of market direction—and for California, the direction is finally upward.
A Gradual Recovery Takes Shape
The recovery didn’t happen overnight. Looking beyond a single month, the data show that total sales for the first 11 months of 2025 remained ahead of last year’s pace, reinforcing the idea that the state’s housing market is stabilizing rather than sliding backward.
“Sales reaching a three-year high is an encouraging signal that California’s housing market continues to heal,” said Tamara Suminski, the association’s 2026 president and a Southern California broker. She noted that while growth remains measured, the steady upward movement suggests confidence is slowly returning among buyers and sellers alike.
That confidence, however, is unevenly distributed. Of the 53 counties tracked statewide, only 25 posted year-over-year sales increases in November, but several of those gains were substantial enough to lift the statewide total.
Smaller Counties Lead the Surge
Some of the most dramatic sales growth occurred in California’s rural and less densely populated regions. Trinity County led the state with a 60% year-over-year jump in sales, followed by Imperial County at 46.7% and Mendocino County at 43.3%.
Interestingly, higher sales activity in these areas did not always translate into rising prices. In Trinity County, for example, median prices declined by more than 10% from a year earlier, highlighting how local conditions can diverge sharply from statewide trends.
Local brokers say environmental risks are playing a growing role in shaping prices and buyer behavior. In forested regions, wildfire exposure and the cost, or outright unavailability, of fire insurance have become critical factors.
Despite those challenges, demand remains resilient in some rural markets. Agents report that retirees and lifestyle-driven buyers continue to seek out less crowded alternatives to major metros, drawn by access to outdoor recreation and quieter communities.
Prices Ease Even as Sales Rise
Statewide, California home prices showed signs of softening, even as sales volumes improved. The median price per square foot for an existing single-family home fell to $423, down from $429 a year earlier. Monthly, the median single-family home price declined to $852,680 in November, slipping from nearly $887,000 in October.
Condo and townhome prices moved in the opposite direction, ticking up by about $10,000 month over month to roughly $660,000, though those figures are not seasonally adjusted and can fluctuate more sharply.
Even with recent declines, California home prices remain far above national norms. By comparison, the national median list price stood near $415,000, according to Realtor.com, underscoring the persistent affordability gap facing California buyers.
Mortgage Rates Provide Some Relief
One of the key forces helping coax buyers back into the market has been the slow retreat of mortgage rates. The average 30-year fixed mortgage rate fell to 6.24% in November, down from 6.81% a year earlier, based on calculations using data from Freddie Mac.
While rates remain well above the ultra-low levels seen during the pandemic, even modest declines can make a meaningful difference in monthly payments, especially in a high-cost state like California.
“Mortgage rates are likely to trend lower in 2026, but any decline will probably be gradual,” said Jordan Levine, senior vice president and chief economist for the California Association of Realtors. He added that with the Federal Reserve signaling caution around future rate cuts and the broader economy showing signs of cooling, California’s housing market is expected to see mild to moderate growth rather than a rapid rebound.
Economists also stress that buyer sentiment remains fragile. Many households are still watching inflation closely and weighing whether now is the right time to commit to a purchase, especially as the market heads into the slower winter season.
Regional Differences Remain Stark
The rebound in sales has not been evenly distributed across California’s major regions. The Far North emerged as the only area to post a year-over-year increase in sales, with activity rising 2%. In contrast, several of the state’s largest and most expensive regions saw declines.
Sales fell 3.5% in the San Francisco Bay Area, 3.1% in both Southern California and the Central Valley, and 2.4% along the Central Coast. These regions have been more sensitive to affordability pressures and interest rate changes, given their higher price points.
Price trends mirrored those regional differences. The Far North led the state with a 2.7% annual increase in median prices, while Southern California recorded a modest 1.2% gain. The Central Coast was essentially flat, edging up just 0.2%.
Meanwhile, the Bay Area experienced the steepest price decline, with median prices down 3.2% from last year, followed by the Central Valley at -1%.
County-Level Standouts
At a more granular level, several counties posted eye-catching price increases. Del Norte County topped the list with a 24.4% jump in median prices, followed by Tehama County at 22.3% and Siskiyou County at 16.9%.
Real estate professionals in these areas say lifestyle appeal is a major draw. Northern coastal and forested regions offer access to redwoods, rivers, and the Pacific Ocean, along with cooler temperatures and reduced wildfire risk compared with inland areas.
Agents report growing interest from buyers relocating northward, particularly after recent wildfire seasons heightened awareness of climate risks in other parts of the state.
A Cautious but Clear Shift
All in all, November’s data suggest California’s housing market is no longer in retreat. Sales are rising, mortgage rates are easing slightly, and buyers are re-engaging, albeit carefully. At the same time, prices are no longer climbing at the breakneck pace seen earlier in the decade, offering a measure of relief to stretched households.
Still, affordability remains a defining challenge. With home prices more than double the national median and borrowing costs still elevated, many potential buyers remain priced out, particularly in coastal and urban markets.
As 2026 approaches, most economists expect steady but unspectacular growth, shaped by incremental rate relief, regional migration patterns, and ongoing economic uncertainty. California’s housing market appears to be finding its footing again, slowly, unevenly, but with renewed momentum after years of volatility.
