CA Home Sales Forecast To Climb 3.7% In 2027

California’s housing market is sending mixed signals heading into year-end. The California Association of Realtors is projecting a modest sales rebound for 2027, with affordability stabilizing and inventory slowly improving — but the near-term picture looks rougher. Mortgage rates just climbed to their highest level since November 2023, mortgage applications are falling as borrowers retreat, and consumer confidence has sunk to its lowest reading in over a decade. Homeowners are staying put longer than ever, choking off the resale supply that would normally ease prices. The result is a market caught between a brighter long-term forecast and a difficult stretch right now, with opportunity still there for buyers and investors who can navigate higher borrowing costs.

In The News:

C.A.R. — C.A.R. Releases Its 2027 California Housing Market Forecast (October 7, 2026) — The California Association of Realtors forecasts existing single-family home sales will rise 3.7% to 277,900 units in 2027, with the median price up 1.4% to $894,400. C.A.R. expects the state’s housing affordability index to hold steady at 20%, with Chief Economist Jordan Levine citing easing geopolitical tension and subsiding economic uncertainty as tailwinds for modestly improved demand next year.

Freddie Mac — Mortgage Rates Average 7.40% (October 8, 2026) — The 30-year fixed-rate mortgage averaged 7.40% this week, up from 7.28% the week prior and marking a seventh straight weekly increase — the highest reading since November 2023. A year ago the rate stood at 6.30%. The 15-year fixed rate climbed to 6.73%, adding further pressure to refinance activity and monthly affordability for California buyers.

MBA — Mortgage Applications Decrease in Latest MBA Weekly Survey (October 7, 2026) — Mortgage applications fell 4.2% for the week ending October 2 as the 30-year rate touched 7.49%, a near three-year high. The purchase index dropped 2% from the prior week and sat 15% below year-ago levels, with the Mortgage Bankers Association noting that rising borrowing costs are pushing many would-be buyers back to the sidelines.

RealEstateNews.com — In Best-Case Scenario, ‘Normal’ Housing Market Still 2+ Years Out (October 8, 2026) — A Redfin analysis finds the mortgage-rate-to-income ratio, now 34–36%, won’t return to its 30% “normal” threshold until at least early 2029 even in a best-case scenario of 6% rates. The report also flags that new homes are now priced below existing homes for the first time in 52 years, as builders lean on incentives to move inventory.

Pasadena Now — California Housing Market Still Stuck As Mortgage Rates Rise And Consumer Confidence Sinks (October 8, 2026) — Weak job growth, a Conference Board confidence index at its lowest since 2014, and borrowing costs near 7.5% are keeping California's market sluggish. Homeowners are now staying put a record 15 years on average, and just 43% of sellers plan to buy another home — the lowest share in 14 years — as elevated rates discourage trade-up moves.