California home prices dip for 3 straight months

Good news for California house hunters: Prices have fallen below their year-ago levels for three consecutive months, the first prolonged dip since 2023.

California’s $725,000 February median price represents a 1% year-over-year drop, according to real estate tracker Attom’s tally of sales of houses and condos, both existing homes and newly built. My trusty spreadsheet tells me this dip follows declines in December and January, and that December’s 2% drop was the largest decline since May 2023.

Recall that February came before all the economic anxieties created by the Iranian conflict. Still, the state’s business climate has been wobbly for many months, particularly as slow local hiring weakened consumer confidence.

The recent slips don’t offer much help to California house hunters battling lofty prices. The statewide median is only 3% off its June 2025 peak of $751,000.

As a result, homebuying remains lethargic. February’s statewide sales of 21,912 were the third-slowest since 2005. The month’s purchases were off 3% from the year-earlier total and 24% below the 22-year February average.

This is a long-running chill dating to 2022, when mortgage rates rebounded off historic lows.

During the past four years, 1.34 million California homes were sold – 26% fewer than in the previous four years.

The price is wrong

Let’s be honest: It’s all about the monthly payments for house hunters.

Imagine a Californian buying February’s median-priced home with a 30-year fixed-rate mortgage at the 6.1% average rate over the past three months, assuming a 20% down payment.

That gave a California buyer a $3,520-a-month payment. Thanks to recent price dips – and the lowest loan rates since late 2022 – that burden is down 9% over the past year and 12% below the high of $3,988 in June 2024.

Please note that this Golden State mortgage payment metric does not include other ownership expenses such as property taxes, insurance, association fees or maintenance costs. And don’t forget the $145,000 down payment needed to get this payment.

Yes, price appreciation has cooled since rates rebounded off historic lows. California’s median price rose 10% over the last four years, compared with a 45% gain over the previous four years.

Still, California’s estimated house payment grew 100% in eight years. Yes, it doubled.

Nationally speaking

The typical American house hunter faces slightly different conditions.

U.S home prices continue to rise, according to Attom’s math. The $359,000 February median is up 3% from a year ago. That’s the largest annual gain since July 2025. Additionally, the price is just 3% off the June 2025 peak of $370,000.

Sales are cooler, but not as chilled as California. The 246,394 sales nationwide marked the eighth-slowest February since 2005, down 9% year-over-year and 10% below average.

The past four years of sales totaled 17.5 million, down 17% vs. 2018-22.

Payments dipped across the U.S., too. February’s $1,743 estimate 5% below the year-ago burden and 10% below the high of $1,941 in June 2024. Californians will wince to learn that the down payment for a typical American purchase is only $72,000.

Slower appreciation is also seen nationwide. The U.S. median rose 16% in the last four years, compared with a 48% gain over the previous four years.

Still, the American buyer’s burden – the monthly cost – jumped 115% in eight years.

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

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