California Housing Market Forecast: Modest Growth, Stable…

Event summary

California home sales forecasted to rise 3.7% to 277,900 units in 2027, up from 268,100 in 2026.
Median home price expected to increase 1.4% to $894,400 in 2027, following a 0.8% rise in 2026.
Housing affordability to remain unchanged at 20% in 2027, after improving from 19% in 2025.
30-year fixed mortgage rate projected to stay at 6.6% for the third consecutive year.
U.S. GDP growth rate anticipated to improve to 2.2% in 2027, up from 2.0% in 2026.

The big picture

The California housing market is poised for gradual recovery in 2027, with modest price growth and stable affordability. The forecast reflects broader economic trends, including improving GDP growth and easing inflation, which are expected to support market conditions. However, the persistent shortage of homes for sale will continue to influence price dynamics and overall market growth.

What we're watching

Supply Constraints: Whether the mortgage lock-in effect will continue to limit housing inventory in 2027.
Economic Conditions: How geopolitical tension easing and economic uncertainty subsiding will impact demand.
Market Dynamics: The pace at which market conditions normalize and the lending environment improves.