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California’s median home price breaks a

California Association of Realtors News release

SACRAMENTO — California home sales increased from the previous year in May for the second consecutive month, while a shift in sales of higher-priced properties buoyed California’s median home price to another historic high as housing supply tightens, the California Association of Realtors recently reported. With home sales increasing at a year-over-year growth pace of 5.1% to a seasonally adjusted annualized rate of 268,810 homes, the California housing market experienced the strongest annual gain in eight months, according to data collected by CAR from more than 90 local Realtor associations and MLSs statewide. On a monthover-month basis, home sales

dipped 3.1% from April’s upwardly revised 277,360 units. The statewide annualized sales figure represents what would be the total number of homes sold during 2026 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

May’s statewide sales remained below the 300,000unit benchmark for the 44th consecutive month. Despite the month-to-month pullback, May’s stronger-than-expected performance pushed sales up 1.2% through the first five months of 2026, an indication that homebuying activity has picked up as geopolitical tensions showed signs of easing in recent weeks.

“California’s home sales softened

n See HOME PRICE, page 3

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in May as broader economic uncertainty continued to weigh on consumer confidence and homebuying sentiment,” said CAR President Tamara Suminski, a Southern California broker and Realtor. “Even so, the recent easing in mortgage rates is an encouraging development, and if that trend continues, it could help bring more buyers and sellers back into the market and support a gradual improvement in housing conditions beginning in the third quarter.”

Driven by continued sales gains in the higher-priced segment, California’s median home price reached a new record high of $930,260 in May. The home price rose 2.3% from April’s downwardly revised price of $909,410. The monthly gain was more than double the historical average typically observed between April and May over the past 30 years. The median price climbed 3.1% year over year, marking the strongest annual gain since March 2025. The increase was enough to push the statewide median above $900,000 for the second time in 2026.

A record share of million-dollar home sales in May continued to shift the statewide sales mix toward higherpriced properties.

Sales of homes priced between $1 million and $2 million surged 8.2% from a year earlier, while sales above $2 million soared 8.5%. By comparison, sales in the $500,000 to $1 million range declined 3.4%, underscoring the affordability challenges facing middle-income buyers. Strong equity market performance over the past two months supported higher-end housing demand. The growing concentration of activity in the higherend segment was also reflected in the share of million-dollar home sales, which reached a record-high 38.5% of all transactions.

“Housing supply has remained constrained in recent months as the lock-in effect continued to put many would-be sellers on the sidelines, intensifying competition and placing upward pressure on home prices,” said CAR Senior Vice President and Chief Economist Jordan Levine. “While the statewide median price typically reaches its seasonal peak in May, the recent easing of tensions in the Middle East could bring more buyers back into the market and keep price pressures up at the start of the third quarter.”

Other key points from CAR’s May 2026 resale housing report include:

• Four of California’s five major regions

recorded year-overyear increases in nonseasonally adjusted home sales in May, although the pace of growth varied considerably across the state. The Central Coast led all regions with a robust 21.4% increase from a year earlier, while the San Francisco Bay Area (5.5%) and the Central Valley (0.1%) also posted a more moderate gain from last year. Southern California (-0.4%) and the Far North region (0.4%) both recorded an annual decline in sales but the dips were attributed primarily to fewer days of transactions in May 2026 compared to the same month last year.

• At the county level, 32 of the 53 counties tracked by CAR recorded year-over-year sales gains in May, with half (16) posting doubledigit increases from a year earlier. Glenn led all counties with a 54.5% surge in sales, followed by Monterey (41.2%) and Amador (39.5%). Meanwhile, 18 counties experienced annual sales declines, including 9 that fell by more than 10%. Trinity posted the steepest drop (-72.7%), while Del Norte (-50%) and Plumas (-31%) recorded the second- and third-largest declines, respectively. CAR notes these dramatic fluctuations are largely due to small transaction

sizes and shifting sales mixes rather than actual home-value depreciation.

• Housing inventory remained relatively tight in May, slipping further below its yearago level despite edging up from April. The Unsold Inventory Index increased 3% from April to May but declined 10.5% on a year-overyear basis. While total active listings followed their typical seasonal pattern and continued to rise month-tomonth, they fell below year-ago levels for the fourth consecutive month and posted their largest annual decline since December 2023. Elevated mortgage rates, persistent inflation concerns, and ongoing geopolitical uncertainty may discourage some homeowners from entering the market, particularly those reluctant to give up existing low-rate mortgages. As a result, inventory constraints are likely to remain a challenge during the peak homebuying season and could prevent inventory conditions from improving during the remainder of the buying season.

• Total active listings declined on a yearover-year basis in 40 of the 53 counties tracked by CAR, reflecting improving housing demand and a tightening supply environment in many

parts of the state in May.

San Francisco recorded the steepest decline, with active listings plunging 42% from May 2025, followed by Marin (-31.2%) and Nevada (-31.1%). Another 19 counties posted doubledigit declines in active inventory, suggesting that buyer demand has strengthened faster than new supply has entered the market. Meanwhile, 13 counties recorded year-over-year increases in active listings, led by Mono (47.8%), Calaveras (28.8%), and Tulare (23.9%). The widespread decline in active listings reinforces the broader statewide trend of tightening supply conditions heading into the summer months.

• The median number of days it took to sell a California single-family home was 22 days in May, unchanged from a year ago.

• The statewide salesprice-to-list-price ratio has remained consistent for a few months at 100%, mirroring both last month and last year’s numbers.

• The median price per square foot for an existing California singlefamily home increased from $439 in May 2025 to $447 this May.

• The monthly average 30-year fixed-rate mortgage rose to 6.44% in May, up from 6.33% last month, but down from the 6.82% average recorded in May 2025.

Home sales expected to improve in second half of 2026

National Association of Realtors News release

WASHINGTON, D.C. — Home sales are expected to be modestly better in the second half of 2026, provided that inventory and housing supply continue to expand, National Association of Realtors Chief Economist Dr. Lawrence Yun said during the Residential Economic Issues and Trends Forum at the 2026 REALTORS® Legislative Meetings.

NAR’s current forecast calls for existing-home sales to rise 4% this year, with the median home price also climbing 4%. Mortgage rates are projected to average 6.5% in 2026. Yun added that housing wealth accumulation will continue in 2026, with the typical homeowner gaining approximately $16,000 in wealth this year.

“Homeowners will continue to build wealth, while renters are simply spinning their wheels,” Yun said.

Despite headwinds in the housing market, Yun said the U.S. economy will avoid a recession in 2026, pointing to strong business investment in artificial intelligence and data centers. The unemployment rate is expected to remain under 5%, and job gains are projected to reach 400,000 this year.

Yun also offered a long-term projection, running multiple scenarios to estimate when the national median home price — currently $430,000 — would reach $1 million. Each scenario pointed to roughly the same answer: about 25 years.

To illustrate the power of long-term appreciation, Yun noted that the

national median home price was just $90,000 in 1990. Even San Francisco, considered super expensive at the time, had a median price of only $250,000.

Also speaking at the forum, Dr. Jessica Lautz, NAR deputy chief economist and vice president of research, focused on who is actually buying homes right now despite the challenging market. Lautz said the housing market may feel like it’s in gridlock, but that is not a universal experience — distinct buyer segments are actively purchasing, whether driven by necessity, determination or housing equity.

“I’ve been traveling around the nation this year, and I am hearing a lot from you that it’s a really wonky market,” Lautz told the audience.

“You’ll list a home on the market, and sometimes it’ll sit for months. And

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sometimes it’s going to have multiple offers, and they can be next door to each other.”

Lautz walked through a series of buyer profiles backed by NAR research data, identifying opportunities for Realtors to recognize and reach potential clients they may be overlooking.

“We talk incessantly about first-time homebuyers. What about first-time sellers?” Lautz said, noting that 17% of younger baby boomers who sold this year had never sold a property before.

Lautz also addressed persistent myths holding back potential buyers.

“Misinformation is out there,” Lautz said, noting that many potential buyers still believe they need a 20% down payment. “The typical down payment for first-time homebuyers was just 10% last year.”

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