C.A.R. releases its 2027 California Housing Market Forecast

California home sales are expected to rise next year,
with modest price growth and stable affordability supporting the market.

• Existing, single-family home sales are forecast to total 277,900 units in 2027, an increase of 3.7 percent from 2026's projected sales pace of 268,100.
  
  
• California's median home price is forecast to rise 1.4 percent to $894,400 in 2027, following a projected 0.8 percent increase to $882,200 in 2026 from 2025's $875,600.
  
  
• Housing affordability* is expected to remain unchanged at 20 percent next year after increasing to a projected 20 percent in 2026 from 19 percent in 2025.

SACRAMENTO, Calif., Oct. 7, 2026 /PRNewswire/ -- California home sales are forecast to rise in 2027 as the state's housing market continues its gradual recovery. With modest home price growth, stable affordability and improving inventory conditions, the market is expected to offer more opportunities for both buyers and sellers in the year ahead, according to a housing and economic forecast released today by the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.). 

The baseline scenario of C.A.R.'s "2027 California Housing Market Forecast" sees an increase in existing single-family home sales of 3.7 percent next year to reach 277,900 units, up from the projected 2026 annual sales figure of 268,100. The projected 2026 figure is 1.1 percent lower compared with the pace of 271,100 homes sold in 2025.

The California median home price is expected to edge up 1.4 percent to $894,400 in 2027, following a projected 0.8 percent increase to $882,200 in 2026 from $875,600 in 2025. A continual shortage of homes for sale will remain a defining factor. That imbalance between supply and demand should provide upward support for home prices while limiting the pace of overall market growth.

"We'll start to see market conditions move in a more positive direction for California homebuyers and sellers next year," said C.A.R. President Tamara Suminski, a Southern California broker and REALTOR^®. "At the same time, an improved but still limited availability of homes for sale will contribute to continued strength in home prices. As confidence picks up and mortgage rates ease, we expect more people who have been waiting on the sidelines to make their move in 2027."

C.A.R.'s 2027 forecast predicts U.S. gross domestic product (GDP) growth rate to improve by 2.2 percent in 2027, after a projected increase of 2.0 percent in 2026. With the state's nonfarm job growth projected to remain at 0.3 percent in both 2026 and 2027, California's unemployment rate is expected to dip to 5.4 percent in 2027 from 5.5 percent in 2026.

Inflation will remain elevated in the coming months, and the Consumer Price Index (CPI) for 2026 will inch up slightly to 3.4 percent, before decreasing to an annual average of 2.4 percent next year. The average 30-year, fixed mortgage interest rate will remain at 6.6% in 2027 for the third straight year. While next year's projected average for the 30-year fixed mortgage interest rate will still be higher than the levels observed in the few years prior to the pandemic, it will be lower than the long-run average of 7.7% in the past 50 years.

"While the market is expected to remain subdued through the end of 2026, demand is anticipated to improve modestly in 2027 as geopolitical tension eases and economic uncertainty subsides," said C.A.R. Senior Vice President and Chief Economist Jordan Levine. "On the supply side, the mortgage lock-in effect will continue to keep many potential sellers on the sidelines, but housing inventory in California should loosen next year as market conditions and the lending environment normalize."

2027 CALIFORNIA HOUSING FORECAST

p = projected
f = forecast
* = % of households who can afford to purchase a median-priced home

Leading the way ...^® in California real estate for more than120 years, the CALIFORNIA ASSOCIATION OF REALTORS^® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered Sacramento.

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SOURCE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)