California's housing market cooled sharply in September, with statewide existing single-family home sales falling to 260,410 units, down 3.4% from August and 6.5% from a year earlier. Southern California took the hardest hit of any region in the state, posting a 9.1% annual sales decline, while Los Angeles County sales dropped 10.9% year over year even as prices in the county kept climbing.
The pullback came as the average 30-year fixed mortgage rate jumped to 6.86% in September, up from 6.67% in August and 6.35% a year earlier, according to Freddie Mac data compiled by the California Association of Realtors. As reported by MyNewsLA.com, California sales totaled 269,620 homes in August and 278,540 in September 2025, underscoring just how quickly the market shifted once borrowing costs accelerated. September marked the 48th consecutive month that statewide sales have stayed below the 300,000-unit annualized benchmark C.A.R. considers the threshold for healthy market momentum.
Southern California Leads the Regional Slowdown
Southern California's 9.1% annual sales decline was the steepest among the state's regions, outpacing even the Far North's 9.0% drop, according to C.A.R. The SF Bay Area and Central Valley saw more modest annual declines of 3.1% and 2.5%, respectively, while the Central Coast was the only region statewide to post a year-over-year sales gain, up 4.4%.
Within Southern California, the picture was uneven. Orange County sales fell 2% year over year and 0.7% from August, a comparatively gentle slide next to Los Angeles County's steeper losses. Those county-level figures are not seasonally adjusted, per the same report.
Los Angeles County did see a 5.4% month-over-month sales increase even amid the steep annual decline, a reminder that the slowdown has not been uniform from month to month. Despite fewer transactions overall, the county's average home price rose from $946,950 in August to $994,670 in September.
Prices Hold Firm Even as Sales Volume Falls
Statewide, the average existing single-family home price actually dipped slightly, falling from $901,420 in August to $899,720 in September, the report notes. But that modest statewide softening masked gains elsewhere: both Los Angeles and Orange counties saw prices rise even as sales slowed. The Los Angeles metro average climbed from $850,000 to $855,000, while Orange County's average jumped from $1.452 million to $1.48 million.
Sellers across California continued to hold the upper hand on price, with the statewide sales-price-to-list-price ratio reaching 98.8% in September, up from 98.2% a year earlier, and a median price per square foot of $434, according to C.A.R. Persistent inventory shortages have continued to prevent any meaningful discounting, even as buyer demand softens. San Mateo County posted the state's highest median home price in September at $2.327 million, while Lassen County had the lowest at $237,500.
Realtors Say Fall Offers Buyers Breathing Room
Tamara Suminski, C.A.R. president and a Southern California broker and realtor, said the slower autumn pace isn't necessarily bad news for shoppers still in the market. “As we move into fall, the market feels a little less rushed, giving buyers more time to carefully consider their options,” Suminski said, per the same account. She added that “with competition easing, well-prepared buyers may have more room to explore their options, negotiate and focus on finding the right home rather than simply hurrying to make an offer.”
Despite the autumn slowdown, statewide single-family home sales through the first nine months of 2026 remained 0.8% ahead of the same period in 2025, buoyed by earlier rebounds in spring and summer, the C.A.R. data shows. Affordability nonetheless remains a defining obstacle: C.A.R.'s Traditional Housing Affordability Index found only 19% of California households could afford the state's median-priced single-family home of $916,750 in the second quarter of 2026, requiring a minimum annual income of $228,400 to manage a $5,710 monthly payment.
A Deeper Affordability Squeeze Shapes the Market
That squeeze has been especially acute in Los Angeles County, where a household needed a minimum annual income of $219,200 as of mid-2026 to afford a typical home with a $5,480 monthly payment, a bar met by only 17% of county residents, as Hoodline previously reported on homeownership delays. A Public Policy Institute of California study found the age at which homeowners outnumber renters has climbed to 47 statewide, compared with 36 nationally, and to 59 in Los Angeles County alone — up from a threshold of 41 as recently as 2009.
Earlier in 2026, a Zillow analysis found California buyers were priced out of nearly 9 in 10 active listings statewide, driven by extreme price concentration in coastal metro areas. On the November ballot, voters will weigh Proposition 37, a measure that would authorize $25 billion in state revenue bonds for down payment assistance loans covering up to 17% of purchase prices on newly built homes, according to KQED. Eligible applicants would need to be California residents earning up to 200% of area median income and provide at least a 3% down payment.
