State home sales projected to rise in 2025

Sales of existing single-family homes in California are expected to reach 304,400 units in 2025, a 10.5 percent increase compared to the 275,400 units predicted for this year, according to the California Association of Realtors.

Median home prices are forecast to climb 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 this year, the Los Angeles-based association reported.

Housing affordability – the percentage of households that can afford a home – is expected to remain at 16 percent next year, a number the forecast called “stable” when compared with the previous few years.

“Although inventory is expected to loosen as rates ease, demand will also increase with lower mortgage rates and limited housing supply, which will push home prices higher next year,” said Jordan Levin, the association’s chief economist, in a statement. “Price growth is expected to be slower, but the housing shortage will keep the market competitive outside of big economic shocks, so prices will still rise.

“Assuming a healthy economy in 2025 that slows but doesn’t shrink, home prices should rise modestly across California.”