California Housing Market Forecast for the Next 2 Years: 2026-2028

The California housing market is stabilizing with moderate annual home price growth of 2.5% to 4% expected through 2028. Increased inventory, around 156,300 homes for sale, offers buyers more choices and less bidding competition. Mortgage rates are steady near 6%, aiding payment predictability. Affordability remains a challenge, with only 18% of households qualifying for typical mortgages. Entry-level homes and affordable areas will see high demand. Sellers must price realistically, and investors should focus on strong rental markets.