California, January 25, 2026
California’s housing market is grappling with a significant drop in homebuying activity, hitting its second-lowest sales level in 21 years. With just over 23,000 homes sold in November, first-time buyers are particularly affected, facing affordability challenges. The state’s affordability index remains critically low, with only 14% of households able to afford median-priced homes. Varying regional market performances reveal a complex economic landscape, highlighting ongoing issues like a long-term housing shortage of 3 million units.
San Diego, California
California’s Housing Market Faces Significant Decline
California’s housing market has experienced a significant decline in homebuying activity, reaching its second-lowest level in 21 years. In November 2025, California recorded just 23,317 existing and newly built homes sold, marking a 30% decrease from the long-term average and the second-lowest November sales since 2005. This downturn is attributed to a combination of elevated mortgage rates, high home prices, and limited inventory, which have collectively deterred potential buyers from entering the market.
First-Time Homebuyers Struggle
The decline has been particularly pronounced among first-time homebuyers. In 2024, first-time buyers accounted for a historic low of 21% of all home purchases, with the median age of these buyers rising to 40 years. This trend underscores the challenges faced by newcomers in affording homeownership in the current economic climate.
Affordability Issues Persist
Affordability remains a significant hurdle for many prospective buyers. In the second quarter of 2023, the affordability index in California stood at just 14%, meaning only 14% of households could afford the median-priced home. This situation has been exacerbated by high home prices and mortgage rates, making it increasingly difficult for residents to enter the housing market.
Regional Disparities in Market Performance
The housing market’s performance varies across different regions of California. For instance, the San Francisco Bay Area experienced a collective 3.2% drop in median home prices, while counties like Napa and San Francisco saw price appreciation, indicating a diverse economic landscape within the state.
Long-Term Housing Shortage
California has faced housing shortages for decades. As of 2025, the shortage was estimated at 3 million housing units, contributing to the persistent affordability issues and influencing the current market dynamics.
Conclusion
The combination of high home prices, elevated mortgage rates, and limited inventory has led to a significant decline in homebuying activity in California, reaching its second-lowest level in 21 years. This trend poses challenges for both prospective buyers and the broader housing market, highlighting the need for strategic solutions to address affordability and inventory constraints.
Frequently Asked Questions (FAQ)
What was the homebuying activity in California in November 2025?
In November 2025, California recorded just 23,317 existing and newly built homes sold, marking a 30% decrease from the long-term average and the second-lowest November sales since 2005.
What percentage of home purchases were made by first-time buyers in 2024?
In 2024, first-time buyers accounted for a historic low of 21% of all home purchases, with the median age of these buyers rising to 40 years.
What is the current affordability index in California?
In the second quarter of 2023, the affordability index in California stood at just 14%, meaning only 14% of households could afford the median-priced home.
How does the housing market vary across different regions in California?
The housing market’s performance varies across different regions of California. For instance, the San Francisco Bay Area experienced a collective 3.2% drop in median home prices, while counties like Napa and San Francisco saw price appreciation, indicating a diverse economic landscape within the state.
What is the estimated housing shortage in California as of 2025?
As of 2025, the housing shortage in California was estimated at 3 million housing units, contributing to the persistent affordability issues and influencing the current market dynamics.
Key Features of the California Housing Market Decline
| Feature | Details |
|---|---|
| November 2025 Home Sales | 23,317 existing and newly built homes sold, a 30% decrease from the long-term average. |
| First-Time Buyer Share in 2024 | 21% of all home purchases, with a median age of 40 years. |
| Affordability Index in Q2 2023 | 14%, indicating only 14% of households could afford the median-priced home. |
| Regional Price Variations | San Francisco Bay Area saw a 3.2% drop in median home prices; Napa and San Francisco counties experienced price appreciation. |
| Estimated Housing Shortage in 2025 | 3 million housing units, contributing to affordability issues. |
Deeper Dive: News & Info About This Topic
HERE Resources
Sacramento Adventist Capitals Defeat San Diego Academy Cavaliers
Mental Health Crisis Highlights Public Safety Concerns in San Diego
Arts District Liberty Station Marks 25 Years of Creativity
Weekend Events to Enjoy in San Diego
Discover San Diego’s Weekend Events
San Diego Weekend Events: Restaurant Week and Monster Jam
San Diego’s Economic Outlook Amid Mayor Gloria’s Initiatives
California’s Investor-Owned Homes Reach 17% of Total
San Diego Nonprofits Address Housing Crisis with Innovative Solutions
University Funding Concerns Persist in California
Author: STAFF HERE SAN DIEGO WRITER
The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
