Want a house in California? It’ll likely cost you over $900,000.
The statewide median sales price for a previously owned single-family house surpassed $900,000 for the first time in April, a shocking figure that underscores just how unaffordable housing has become across the Golden State.
The April median of $904,210 is up 11.4% from the same month a year earlier, according to data from the California Assn. of Realtors. The median — the point where half the homes sold for more and half for less — has now climbed more than $100,000 in just over two years.
That rise in home prices comes despite the fact mortgage rates are sky-high relative to recent memory. Last week, the average rate on a 30-year fixed mortgage was 7.02%, more than double the 3% and below rates seen during the COVID-19 pandemic, according to Freddie Mac.
High prices and high rates have created the most unaffordable housing market in a generation, but economists say prices keep rising because many homeowners refuse to sell and give up their sub 3% rates, creating an extreme shortage of inventory.
Wealthy Californians also have hordes of excess cash they can plow into down payments that help offset high borrowing costs.
If prices keep rising at 11% a year, the California median house price would climb above $1 million in 2025.
That may not happen, however.
In recent weeks, more homes have started to come onto the market as some owners start to decide a new home is more important than a low rate.
Inventory is still extremely tight and economists don’t expect the floodgates to open. But in Los Angeles, Riverside, San Bernardino and Ventura counties, total listings in April climbed above year-ago levels for the first time since the first half of 2023, with each county recording an increase of at least 5%.
Orange County was the only county to see a decline, while in San Diego County, inventory has risen for two consecutive months and is 18% above what it was a year ago.
Some experts say the supply increase likely isn’t enough to send home prices down, but it should make values climb at a slower pace.
That might mean a $1-million median is a bit further off, but not by much.
“If we don’t hit it in 2025, we will probably hit it in 2026 — minus a big downturn in the economy,” said Jordan Levine, chief economist with the California Assn. of Realtors.