What Pending Home Sales Mean for California Buyers
Pending home sales across the U.S. rose sharply in late 2025, reaching the highest level since early 2023. According to the National Association of Realtors, this unexpected increase is a sign of renewed buyer confidence and improving affordability. For California homebuyers, this trend signals a prime opportunity to apply for a mortgage.
At LBC Mortgage, we know that understanding broader housing trends helps our clients make better decisions locally. Rising pending sales aren’t just a national statistic—they influence what happens in California’s competitive real estate market. Acting early can give buyers a clear edge, especially as rates shift and demand grows.
Pending home sales track the number of signed purchase contracts before the transaction officially closes. This metric gives an early look at the housing market’s momentum. When pending sales go up, it typically means more homes will close within the next one to two months.
For buyers in California, this is more than just a signal of national movement—it means increased activity is on the horizon. Getting pre-approved and applying for a mortgage now allows you to move faster in a tightening market.
1. Pending Sales Are a Reliable Housing Market Indicator
Early data shows future activity
The Pending Home Sales Index reflects how many buyers are signing contracts each month. When this index rises, it means more buyers are entering the market and ready to close. In November 2025, the index showed the strongest growth in nearly three years, rising 8.3% month-over-month and exceeding economic forecasts.
This kind of shift is a clear indication that market conditions are improving. For homebuyers, it often points to a window of opportunity before home prices adjust to higher demand. If you wait too long to apply for a mortgage, you risk competing with more buyers and possibly missing out on better terms.
Getting ahead of future price increases
In California, where homes often receive multiple offers within days, acting early makes a difference. Buyers who start the mortgage process now can be ready to make offers quickly. This increases your chances of securing a home before bidding wars intensify due to more active buyers entering the market.
2. Rising Demand Creates Stronger Price Support
Higher pending sales reflect growing buyer interest
As pending home sales rise, they show that more buyers are willing to make offers. This is often tied to improved financial conditions, such as lower interest rates or higher consumer confidence. When demand increases, it typically leads to more closed transactions and rising prices.
That’s especially important in a state like California, where home values are already among the highest in the country. Rising demand adds pressure to prices, especially when housing inventory is limited. By applying for a mortgage now, you position yourself to buy before prices edge higher.
Lock in your buying power early
When prices start to rise, even modest increases can affect your buying power. For example, a $20,000 jump in home price could mean a higher down payment or a tighter monthly budget. By securing your mortgage earlier, you lock in today’s purchase power. LBC Mortgage helps California buyers analyze local pricing trends and apply early to maximize affordability.
3. Mortgage Rates Are More Favorable Than in 2024
Rate drops are boosting buyer confidence
Mortgage rates have been falling in recent months, helping to spark the recent rise in pending home sales. The average 30-year fixed mortgage rate dipped to around 6.18% in December 2025—well below the 7%+ rates seen in much of 2024. These lower rates reduce monthly payments and open the door to more financing options.
For California buyers, this improvement in rates can make a big difference. Lower rates may allow you to qualify for a more expensive home, afford a better neighborhood, or reduce long-term interest costs. And even a small change in the rate can impact your payment by hundreds of dollars per month.
Apply before rates increase again
While recent declines are encouraging, mortgage rates are still influenced by inflation, Federal Reserve policy, and the bond market. That means today’s rates won’t last forever. The best time to apply for a mortgage is when rates are low and trending downward. Acting now gives you the chance to lock in a more favorable rate and protect yourself against future volatility.
LBC Mortgage works closely with clients to time rate locks and explore financing options that match their budget and long-term goals. We don’t just quote rates—we help you make the most of them.
4. California's Limited Inventory Makes Timing Critical
Inventory remains tight across the state
Even as pending sales rise nationally, inventory in California remains well below demand. The state has long faced a housing shortage, especially in desirable markets like Los Angeles, San Diego, San Jose, and the Bay Area. With fewer homes available, each new listing attracts strong attention—especially when market activity rises.
Pending home sales don’t just reflect buyer interest; they also predict future pressure on the existing supply. When contracts rise, it means that inventory will tighten even more as homes go off the market.
Be ready when homes hit the market
In a fast-moving market, buyers don’t have time to wait for mortgage approval after finding the right home. Sellers favor offers backed by strong, verified financing. At LBC Mortgage, we help you get fully pre-approved so you can act quickly and confidently. This makes a difference in competitive neighborhoods where the best homes may receive multiple offers within days.
Applying early means you're ready to make a move as soon as you find a property. It also allows time to gather documents, review loan programs, and ask questions—without rushing the process.
5. Pre-Approval Enhances Your Negotiating Power
Sellers take pre-approved buyers seriously
As pending sales increase, more buyers will be entering the market with offers. In this environment, sellers are looking for the most reliable path to closing. Buyers with full pre-approval have a clear advantage. Pre-approval shows that your financing has been reviewed, your income verified, and your credit checked. It gives sellers confidence that your deal will close smoothly.
LBC Mortgage structures pre-approvals to meet California sellers’ expectations. We help buyers stand out by preparing strong financial packages that show readiness to move forward without delay.
Be competitive in multiple-offer situations
California homes frequently attract multiple bids, especially when pending home sales are rising. A well-prepared offer with financing already in place carries more weight. It can be the difference between winning the home or missing out. Sellers often accept slightly lower offers if they come with a fast, secure close—and that starts with having your mortgage lined up in advance.
We guide you through the entire process, from pre-approval to closing. Our experience in California’s fast-paced market means you’ll have a trusted team in your corner every step of the way.
Take Advantage of Today’s Market Momentum
Rising pending home sales are a clear sign that the market is picking up. For California buyers, this is a strong indicator to take action. Mortgage rates have improved, demand is increasing, and inventory is expected to tighten. By applying for a mortgage now, you stay ahead of these shifts and put yourself in a stronger position to secure the home you want.
At LBC Mortgage, we help California buyers move with confidence. Whether you’re buying your first home, upgrading, or relocating, we offer expert guidance, flexible loan options, and personalized service. If you’re ready to make your next move, we’re ready to help you get there—starting with the right mortgage.
