California homebuying drops to 2nd-lowest level in 21 years

California homebuying fell to its second-lowest level for a November in 21 years, despite mortgage rates at their lowest in three years.

Statewide, 23,317 existing and newly built homes — houses and condos — were sold, according to Attom data dating to 2005. This broad tally of sales is down 8% over 12 months and 30% below average.

It’s no short-run slip. Sales over the past three years averaged 26,428 per month – 31% below the pace of the previous 18 years.

Contemplate the economic swings behind the sales collapse.

Mortgage rates averaged 6.3% in the three months ended in November, according to Freddie Mac. That’s down from 6.5% a year earlier and the recent peak of 7.4% in November 2022, when the national economy was overheated. Previously, rates tumbled to 2.73% in January 2021 when coronavirus darkened economic prospects.

In affordability-challenged California, why didn’t the year-end rate dip boost sales?

Well, cheaper financing can be tied to a wobbly business climate. Economic uncertainty is not good for homebuying.

The price is wrong

Plus, California’s pricing remains stubbornly high.

The $735,000 median sales price for November was up 0.3% in a year and sits just 2% below the $751,000 peak set in June 2025.

The good news for house hunters is that appreciation has cooled. Home prices are up 9% during the past three years vs. 32% gains in 2019-2022.

Payment pain

Who’s got $3,632 a month to buy a home?

That’s an estimated mortgage payment a buyer would get at November’s median price – even with the cheapest rates since 2022.

Yes, California’s buying burden is 9% below its peak in June 2024. However, payments are also up 94% over the past six years.

This math does not include other recurring ownership costs, such as property taxes, insurance, maintenance, or association fees.

Also, keep in mind the $147,000 down payment needed to make this deal work.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com