What To Expect in the 2026 California Housing Market

Have you been holding off on buying or selling a home because the market has felt uncertain and unaffordable? After a slow 2024 and 2025, many people have been waiting for the right moment. But what if I told you that 2026 could finally be the year things start to turn around?

Experts predict a 14% rise in home sales next year if mortgage rates ease, with existing sales up nearly 10% as pent-up demand meets improving affordability.

So, what’s driving these changes, and how can you take advantage of them?

The role of interest rates. On December 10th, the Federal Reserve cut the federal rate by 25 basis points. While this doesn’t directly lower mortgage rates, it usually leads to gradual decreases over time.

Lower rates make it easier for buyers to afford homes, which also benefits sellers, especially in neighborhoods where demand is high and inventory is limited.

Why inventory matters. Many homeowners are sitting on low-interest mortgages from previous years, keeping the number of homes for sale tight. But this is starting to change.

Here in Southern California, we’ve seen 30% to 40% more homes on the market this year, particularly in Los Angeles and Orange County. More listings give buyers additional options and more time to make decisions.

Opportunities for buyers and sellers. As mortgage rates gradually decline, more sellers may return to the market to upsize, downsize, or relocate. This gives buyers more options, but it also increases competition for sellers.

Homes that aren’t priced right or properly prepared may have a more complex time selling. Even minor updates, like fresh paint or a pre-listing inspection, can make a big difference when inventory rises but demand stays steady.

In 2026, buyers could have the upper hand, particularly in mid-tier markets. Sellers in high-demand areas can still do well, but having a clear strategy will be key. By planning and understanding how the market works, you can make smarter decisions and reach your real estate goals with confidence.

If you want to be ready when the right opportunity appears, reach out anytime for a free, no-pressure consultation. You can call or text me at (310) 930-5495 or email me at bjones@kingdomrealtyteam.com. I’m here to guide you through every step of the process.