California's homebuying market has been heavily impacted by the Federal Reserve's efforts to combat inflation, which began in March 2022. Sales plummeted, with March 2025 witnessing the third-lowest sales total for the month in two decades, reflecting a 32% decrease from the historical average. Despite rising interest rates and mortgage costs, home prices have remained high, with a median price of $743,250 in March 2025, only slightly below a record. Ultimately, affordability issues are at the forefront of the stagnant market, as buyers face unsustainable increases in housing costs.
In the latest analysis, California home sales fell drastically since the Federal Reserve initiated its inflation-fighting measures, showing a significant decline in market activity.
The Fed's aggressive interest rate hikes have sharply increased mortgage costs, exacerbating an already challenging homebuying landscape in California, where price trends defy expectations.
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