Summary
Housing prices in California are very high, but more people are beginning to afford homes as prices drop slightly and interest rates decrease. By the end of 2025, 18 percent of Californians could afford a median-priced home, a slight increase from earlier. Experts expect housing affordability to improve as home prices and mortgage rates continue to change.
Key Facts
- In California, 18 percent of people could afford a median-priced home costing $869,300 by the end of 2025.
- California's median home price in January was $780,200, much higher than the national median of $423,261.
- San Diego County saw affordability rise from 13 percent to 15 percent in the last year.
- Los Angeles had 17 percent, and San Francisco Bay Area had 23 percent affordability.
- The drop in effective interest rates helped improve affordability.
- Mortgage rates are projected to fall to about 6 percent in 2026.
- California's median single-family home price fell 2.2 percent in late 2025.
- Nationally, 39 percent of households could afford a $414,900 median-priced home in 2025.
