California Housing Market Cools as Existing Home Sales Decline in September

CALIFORNIA — November 8, 2026

California’s housing market experienced a slowdown in September as existing-home sales declined amid elevated borrowing costs and ongoing affordability challenges. Despite the weaker sales activity, the statewide median home price remained relatively stable, highlighting the difference between slowing demand and home values.

The latest report from the California Association of REALTORS® (C.A.R.) shows that existing single-family home sales fell both month over month and year over year. For buyers, the slowdown may create opportunities to explore more options and negotiate in certain markets. For sellers, competitive pricing and an understanding of local conditions remain important.

Key California Housing Market Figures

• Existing-home sales: The seasonally adjusted annualized sales rate reached 260,410 in September, down 3.4% from August and 6.5% from September 2025.
• Statewide median price: The median price was $899,720, a 0.2% decrease from August but a 1.7% increase year over year.
• Year-to-date sales: Existing-home sales remained 0.8% higher than during the same period in 2025.
• Housing inventory: The unsold inventory index stood at 3.7 months, slightly above the 3.6 months recorded a year earlier.
• Mortgage rates: The average 30-year fixed mortgage rate was 6.86% in September, up from 6.67% in August.

Together, these figures suggest that California’s housing market is losing some momentum, although home prices have remained relatively resilient.

Why Are California Home Sales Slowing?

Higher mortgage rates and persistent affordability pressures continue to influence homebuying decisions across California.

When borrowing costs rise, prospective buyers may find it more difficult to qualify for financing or afford the monthly payments associated with a home purchase. Some households may postpone buying, while others may look for less expensive properties or negotiate more carefully.

Sales activity also reflects the number of properties available and the willingness of existing homeowners to sell. Some homeowners with lower mortgage rates may be reluctant to move if doing so means taking on a more expensive loan.

These factors can contribute to slower transaction activity even when demand for housing remains present.

Home Prices Remain Relatively Stable

Although sales declined, California’s statewide median existing-home price remained close to $900,000 in September.

The median price slipped slightly from August but increased compared with September 2025. This indicates that the slowdown in transactions has not translated into a uniform statewide price decline.

Limited housing supply can help support prices even when buyers become more cautious. However, statewide median figures can also be influenced by the types of properties sold during a particular month.

For this reason, a change in the statewide median should not automatically be interpreted as an equivalent increase or decrease in the value of every home.

Homeowners and prospective buyers should review local comparable sales and property-specific factors when assessing market value.

Regional Housing Trends Vary

California’s housing market continues to show differences between regions.

San Francisco Bay Area: The regional median home price increased 1.9% year over year in September. However, existing-home sales declined 3.1% compared with the same month in 2025.

Southern California: The region recorded the largest annual sales decline among California’s five major regions, with sales falling 9.1% year over year. Its median home price nevertheless increased 3.0%.

Central Coast: The Central Coast was the only major region to record annual sales growth, with transactions increasing 4.4%. The region’s median home price also rose 4.4% year over year.

Central Valley and Far North: Results were mixed, with annual sales declining in both regions. The Central Valley’s median price remained virtually unchanged from a year earlier, while the Far North recorded a 3.4% annual price decline.

These differences demonstrate why buyers and sellers should assess conditions within their specific market rather than relying exclusively on statewide figures.

Inventory and the Pace of Home Sales

California’s active housing listings increased 0.5% compared with September 2025, marking the first annual increase in eight months.

The unsold inventory index remained at 3.7 months, compared with 3.6 months a year earlier. This measure estimates how long it would take to sell the current inventory at the prevailing sales pace if no additional homes entered the market.

The statewide median time required to sell an existing single-family home was 29 days in September, compared with 32 days in September 2025. The statewide sales-to-list-price ratio was 98.8%, up from 98.2% a year earlier.

These indicators suggest that inventory conditions are gradually changing, but they do not establish that every California market is becoming a buyer’s market. Local supply, pricing and demand continue to influence how quickly individual properties sell.

What Does This Mean for Buyers and Sellers?

For homebuyers: Slower sales may provide more time to evaluate properties and compare financing options. In markets where listings are accumulating or homes are taking longer to sell, buyers may have opportunities to negotiate prices, repairs or other contract terms.

For sellers: Accurate pricing remains important as affordability pressures affect buyers. Reviewing comparable sales, preparing the property for market and considering reasonable offers can help sellers respond to changing conditions.

For homeowners: A statewide sales slowdown does not necessarily mean an individual property’s value is declining. Neighborhood conditions, property characteristics and recent comparable transactions remain important.

For property managers and community associations: Housing turnover, maintenance planning and resident demand can vary with local economic conditions. Monitoring neighborhood activity may help inform operational planning and communication with residents.

What Should California Residents Watch Next?

The coming months will provide additional insight into whether the slowdown in sales continues and how prices respond to changing demand.

Important indicators include mortgage rates, new listings, pending sales, completed transactions, inventory levels and the number of homes receiving price reductions.

If borrowing costs remain elevated, some prospective buyers may continue to delay purchases. However, limited inventory and regional differences in demand could help support prices in certain markets.

The direction of the market will depend on how these factors interact rather than on sales figures alone.

Frequently Asked Questions

Are California home prices falling?

Not uniformly. The statewide median price declined slightly from August but was 1.7% higher than in September 2025. Individual markets may experience different price movements.

Why did existing-home sales decline in September?

Higher borrowing costs and affordability challenges contributed to weaker buyer demand. Other factors, including available inventory and homeowners’ willingness to sell, also influence market activity.

Does lower sales activity mean buyers have more negotiating power?

Potentially, but the opportunity varies by location and property. Buyers may have more flexibility where inventory is increasing or homes are taking longer to sell.

Is California experiencing a buyer’s market?

The statewide figures alone do not establish that California is in a buyer’s market. Conditions differ across regions, neighborhoods and property types.

What should sellers do in a slower market?

Sellers should review recent comparable sales, set realistic asking prices and consider the property’s condition and competition from similar listings.

Practical Takeaway

California’s September housing figures show a market in which existing-home sales have slowed while statewide prices remain relatively stable.

For buyers, sellers, homeowners and property professionals, the key is to understand local conditions, account for financing costs and make decisions based on current market evidence rather than statewide headlines alone.

As additional housing data becomes available, monitoring inventory, sales activity and mortgage rates will help residents better understand the direction of their local market.

This article is intended for general informational purposes only and does not constitute financial, legal or real estate advice.