Signs Point to a More Normal Housing Cycle
The California housing market is showing signs of stabilizing, and 2026 could mark the most balanced conditions we’ve seen since the pandemic. After several years of extreme price swings, inventory shortages, and rising interest rates, the next phase appears to offer more predictability and opportunity for both buyers and sellers. At LBC Mortgage, we see this shift as a clear signal that now is the time for clients to prepare, plan, and take action.
Supply Is Catching Up With Demand
The past few years have been defined by record-low inventory. Too few homes chased by too many buyers caused bidding wars and price spikes, especially between 2020 and 2022. However, by 2026, housing supply in California is expected to improve significantly. According to the California Association of Realtors, active listings are projected to increase by close to 10%, bringing housing availability much closer to pre-pandemic levels.
This rise in listings gives buyers more choice. It also removes some of the pressure that sellers previously used to drive prices beyond reasonable limits. More balance between buyers and sellers creates a healthier, more sustainable real estate environment. For clients working with us at LBC Mortgage, this means more flexibility, better timing, and greater leverage when shopping for a home.
Home Sales Expected to Rise Slightly
While the number of available homes will go up, demand isn’t disappearing. C.A.R. forecasts that existing home sales will grow by about 2% in 2026, with total transactions expected to reach approximately 274,400 statewide. This shows that buyers are still motivated — they’re just more cautious, and they now have more room to make decisions without being rushed.
This combination of increasing supply and stable demand is what defines a balanced market. For both buyers and sellers, it reduces the uncertainty that made the real estate process stressful during the pandemic years.
Moderate Price Growth Is Good for Buyers and Sellers
California Home Prices Will Rise — But More Slowly
Rapid home price growth has made it difficult for many California residents to enter the market. But in 2026, home values are expected to rise more moderately. Current projections suggest a 3.6% increase in the statewide median price, reaching about $905,000.
That slower pace of appreciation still allows sellers to build equity, but it doesn’t outpace wage growth or stretch buyers beyond their means. It also helps avoid the boom‑and‑bust cycles that can cause long-term instability in the market. For our clients, this creates a more reliable environment to plan for the future.
Affordability Will Begin to Improve
Affordability remains a challenge in California, especially for first-time buyers. However, 2026 may offer some relief. With prices rising more gradually and mortgage rates declining, the state’s affordability index is expected to improve slightly, rising to around 18%. That means nearly one in five households will be able to afford a median-priced home — a step in the right direction.
At LBC Mortgage, we specialize in helping buyers find the right loan programs that fit their budget, even in a high-cost market like California. From first-time buyer loans to creative financing options, we help our clients maximize affordability in every market cycle.
Mortgage Rates Are Projected to Decline
Lower Rates Mean More Buying Power
Mortgage interest rates climbed steadily from 2022 through 2024, hitting levels that pushed many potential buyers out of the market. But starting in 2025, rates began to soften. In 2026, industry experts project that the average 30-year fixed rate will decline further, settling around 6.0%.
Lower rates don’t just make monthly payments smaller — they increase the amount of home a buyer can afford. That expands opportunity across the state, especially in competitive areas like Los Angeles, San Diego, and the Bay Area.
We stay ahead of interest rate changes so we can offer the best possible advice and timing to our clients. Whether you're buying for the first time, upgrading to a new home, or refinancing, we help you take advantage of market trends to improve your long-term financial outcome.
Refinance Opportunities Return
Falling mortgage rates also create new opportunities for homeowners looking to refinance. Many who locked in loans during the rate surge of 2022–2024 now have a window to lower their payments or reduce the term of their loan.
We work closely with clients to identify when refinancing makes sense. Our approach isn’t about pushing a product — it’s about creating value through lower monthly costs or faster equity growth. With rates likely to ease in 2026, now is a good time to revisit your mortgage strategy.
What Makes 2026 Different From Previous Years
Less Volatility, More Predictability
The real estate market from 2020 through 2024 was defined by extremes — extreme price growth, extreme competition, and extreme financing conditions. That volatility made it difficult to plan, especially for families trying to time a move or investment.
2026 appears to offer the opposite: more stability, more predictability, and a return to seasonal trends. A balanced market doesn’t mean perfect timing for everyone, but it does mean fewer surprises. That’s exactly the kind of environment where a strong mortgage partner matters most.
Reduced Competition Creates Better Timing
During the pandemic-era boom, many buyers had to make split-second decisions, waive inspections, or bid far over asking just to compete. In 2026, with more inventory and fewer urgent buyers, you can take the time to find the right home and make thoughtful offers.
This creates an ideal setup for working with our team. We provide fast pre-approvals, clear financing timelines, and real-time rate updates — so you’re always ready to make the right move at the right moment.
LBC Mortgage Helps Clients Win in Any Market
At LBC Mortgage, we’ve helped thousands of clients navigate California’s changing real estate market. Whether the market was hot or cooling, we focused on one thing: giving our clients the best service, tools, and advice to succeed.
We work with a wide range of loan programs, including conventional, FHA, VA, jumbo, and non-QM options. More importantly, we match each borrower to the right solution — not just what’s common, but what fits their specific goals.
Our experience across California’s diverse markets — from coastal cities to inland communities — means we understand local pricing, trends, and timelines. That helps us guide clients through everything from pre-approval to closing with confidence.
