California Home buying Falls Below Great Recession Lows
- 2 days ago
- 1 min read
California Home buying Falls Below Great Recession Lows
Home buying activity in California has dropped to levels even lower than during the Great Recession, reflecting how difficult it has become for many residents to afford homes.
Over the past three years, the number of homes sold statewide has been about 24% lower than the sales pace seen during the 2007–2009 housing crash period, according to housing market data. The slowdown is largely attributed to high home prices, elevated mortgage rates, and limited housing inventory, which have made it difficult for both buyers and sellers to participate in the market.
Despite the drop in sales, prices have remained high. The median California home price has climbed roughly 9% in recent years to around $710,000, staying close to historic highs even as buyer demand weakens. Analysts say the market is partially frozen by the “lock-in effect,” where homeowners with older 3% mortgage rates are reluctant to sell and take on new loans near 7%, limiting the number of homes available.
The affordability challenge is severe: only about 30% of California households can qualify to buy a starter home, far below the roughly 49% that could afford one before the Great Recession. Economists say the combination of high prices and borrowing costs has stalled the market rather than causing a price collapse.
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