Even with mortgage rates hovering around 15-year highs, home prices in California edged higher for the fourth consecutive month in May, according to the latest data from the California Association of Realtors.
The median single-family home price in the Golden State last month was $836,110, roughly $25,000 higher than in April and $100,000 above February’s average, data shows.
The San Francisco Bay Area ($1,300,000), Central Coast ($1,000,000) and Southern California ($800,000) continue to be the priciest, while the Far North region ($380,000) is the most affordable, CAR said.
Home prices are still well below the all-time high recorded in May 2022 when the average California single-family home cost $893,200.
Average Single-Family Home Prices in California
| Region | May 2023 | April 2023 | May 2022 |
| Statewide | $836,110 | $811,950 | $893,200 |
| Condo/Townhomes | $635,000 | $634,000 | $675,000 |
| Los Angeles Metro | $765,000 | $740,000 | $805,000 |
| Central Coast | $1,000,000 | $1,020,000 | $995,000 |
| Central Valley | $485,000 | $463,000 | $510,000 |
| Far North | $380,000 | $385,000 | $425,000 |
| Inland Empire | $574,990 | $565,000 | $596,000 |
| San Francisco Bay Area | $1,300,000 | $1,250,000 | $1,465,000 |
| Southern California | $800,000 | $785,000 | $845,000 |
Additionally, the number of homes under contract in California rose by nearly ten percent in May after dipping in April and March.
Experts say sales continues to fluctuate month to month due in large part to small changes with mortgage rates.
“Let’s be realistic, we’re not going to see mortgage rates of 3% anymore, or even three-and-a-half percent anymore, for a 30-year fixed rate,” Oscar Wei, Deputy Chief Economist with the California Association of Realtors, told KTLA. “So people are saying, okay, when it dips a little, let’s jump in and take advantage.”
After an initial spike in the lead-up to Congress’s debate over the debt ceiling, mortgage rates have hovered in the high 6% range. The Fed has already signaled as many as two more rate hikes this year to tame inflation.
But regardless of where interest rates go in the short term, or even long-term, Wei says the underlying reason home prices move higher in California comes down to simple supply and demand.
“The tight supply is really constraining,” he says. “People are not putting their houses on the market and, of course, we’re just not building fast enough.”