Since the Federal Reserve commenced its inflation combat in March 2022, California's homebuying landscape has dramatically deteriorated. Sales figures have decreased remarkably, with March 2025 recording 26,454 sales, the third-lowest since 2005, and 32% below the 20-year average. Despite the Fed's efforts to stabilize the economy, home prices have continued to rise, reaching a median of $743,250 in March. The combination of soaring mortgage rates and increased home prices has resulted in a significant affordability crisis, thereby stalling homebuying activity across California.
Rising home prices aren't a sign of market strength. They're the reason why homebuying is frozen.
In the 36 months since the Fed started its cost-of-living focus, 27,703 California residences were sold in the average month vs. 39,049 in 2019-22.
The Fed's efforts to cool an overheated economy with pricier financing began in March 2022, totally icing home sales.
California's $743,250 median selling price in March was only 1% short of the record, not reversing even during inflation battles.
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