California Housing Market Poised for 2027 Rebound

The median price for a single-family home is expected to reach $894,400 in 2027, representing a 1.4 percent rise from the previous year. While prices continue to climb, the market remains constrained by a persistent inventory shortage. This supply-demand imbalance provides upward pressure on valuations, even as prospective buyers begin to return to the market.

C.A.R. President Tamara Suminski noted that while availability remains limited, the combination of growing buyer confidence and cooling mortgage rates will encourage those currently on the sidelines to re-enter the market. The association forecasts that the 30-year fixed mortgage rate will hold steady at 6.6 percent for the third consecutive year, remaining below the long-term 50-year average of 7.7 percent.

Economic indicators offer a backdrop of cautious optimism. The state’s unemployment rate is expected to dip to 5.4 percent, while inflation, as measured by the Consumer Price Index, is projected to moderate to 2.4 percent. Senior Vice President and Chief Economist Jordan Levine emphasized that demand should improve as geopolitical tensions and economic volatility subside, allowing for a more normalized lending environment throughout 2027.