March Housing Report

California's affordability challenges are expected to persist, though there was recent growth in housing supply. Despite this, inventory remains tight, supporting high prices, which will likely to continue to climb.

With mortgage rates rising throughout February, the California housing market lost some of its momentum in March. Sales of existing single-family homes dipped from the previous month and fell short from a year ago for the first time in three months. Sales will likely remain soft in the coming months as the recent surge in rates could create housing affordability bumps for potential homebuyers. Housing supply, on the other hand, continued moving in the right direction in March as new listings grew by double-digits and total active listings also advanced past the same level observed a year ago. That said, inventory remains tight according to historical standards and continues to support prices. The statewide median price recorded a strong year-over-year gain in March and stayed above $800,000 for the 11th time in 12 months. Though the mix of sales was partly responsible for the strong surge in the median price as more expensive price segments outperformed their affordable counterparts throughout the state.

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