The real estate industry in 2026 is expected to enter a phase of cautious stabilization and modest growth — especially in Southern California. After several years of rising mortgage rates, tight inventory, and affordability challenges, regional experts now point to slightly improved conditions. As a result, higher sales activity, gradually rising prices, and broader choices for buyers and sellers are becoming more likely.
At the same time, Southern California housing markets continue to face headwinds. For example, insurance cost increases and ongoing affordability constraints remain major concerns. However, forecasts from the California Association of Realtors (C.A.R.) and regional economic analysts still show encouraging signs for 2026. With that in mind, let’s take a closer look at what industry leaders are saying — supported by credible and up-to-date research.
Overview: What’s Driving the Southern California Market in 2026
Several economic and housing factors will shape the real estate industry in 2026 across Southern California. Together, these trends point toward a market that is slowly regaining balance rather than accelerating rapidly.
Key drivers include:
- A slight rebound in home sales as mortgage rates moderate and inventory grows
- Modest increases in median home prices compared to recent flat or stagnant years
- Affordability challenges that persist, although incremental improvements are expected
- Mortgage rates edging lower, which should help restore buyer confidence
- Clear regional variation across Los Angeles, Orange, Riverside, San Bernardino, and San Diego counties
Notably, these expectations align with the California Association of Realtors’ 2026 California Housing Market Forecast, which serves as a foundation for understanding how the state — and by extension Southern California — may perform next year.
C.A.R. releases its 2026 California Housing Market Forecast
California Forecast: A Foundation for Southern California
Statewide Home Sales and Prices
According to C.A.R., existing single-family home sales in California are projected to rise about 2% in 2026 compared to 2025. This increase signals a slow yet meaningful recovery following several years of subdued activity.
Meanwhile, the statewide median home price is forecast to climb 3.6% in 2026, reaching approximately $905,000. Although this represents a new record high, the pace of growth remains far more moderate than during earlier boom cycles.
Taken together, these projections reflect broader optimism for the real estate industry in 2026, particularly as mortgage rates begin to ease. Consequently, more buyers may feel confident re-entering the market after remaining sidelined.
Housing Affordability and Mortgage Rates
C.A.R. also expects housing affordability to improve modestly in 2026. Specifically, forecasts show that about 18% of California households may be able to afford a median-priced home — a slight improvement from recent lows.
At the same time, mortgage rates are projected to decline toward the 6.0% range, down from averages closer to 6.6% in 2025. Even a small reduction in rates can significantly impact monthly payments, which in turn helps stimulate buyer activity throughout Southern California.
As a result, these combined factors suggest that the real estate industry in 2026 may finally offer more balanced opportunities for buyers, sellers, and investors who have waited through recent volatility.
Southern California Market Trends to Watch in 2026
While statewide data provides helpful context, Southern California continues to operate under its own unique dynamics. Local demand, employment patterns, lifestyle preferences, and economic diversity all play critical roles in shaping the region’s housing market.
Below are the major trends influencing the real estate industry in 2026 across Southern California.
Rising Sales Activity Across the Region
Regional economic forecasts indicate that home sales in Southern California are likely to increase modestly in 2026, particularly during the spring and summer months. As mortgage rates decline and buyer confidence improves, transaction volume should gradually follow.
This trend matters for several reasons:
- First, it signals a strengthening cycle after sluggish activity in 2024 and 2025.
- Additionally, higher transaction volume supports price stability while easing inventory stagnation.
- Finally, renewed momentum often encourages hesitant homeowners to list their properties, improving overall market flow.
Overall, a slightly more active market may define the real estate industry in 2026 across Southern California — not explosive growth, but noticeable progress compared to recent flat conditions.
Moderate Home Price Growth in Major Counties
Across Southern California, median home prices are expected to trend upward in 2026, particularly in coastal areas such as Los Angeles and Orange counties. However, growth should remain far more moderate than during the rapid appreciation seen earlier this decade.
For example:
- Los Angeles County is showing prices that are generally flat to slightly higher, paired with more inventory and reduced competition.
- Orange County continues to command higher price points, although improving inventory has increased days on market.
- Inland Empire communities remain relatively more affordable, attracting buyers priced out of coastal markets.
These conditions suggest that while price appreciation is likely, the real estate industry in 2026 will not mirror the aggressive gains of previous boom years.
Inventory and Buyer Leverage
Another notable shift involves improving inventory levels throughout Southern California. As more listings come to market, buyers are gaining additional leverage, and extreme all-cash or multiple-offer scenarios are becoming less common.
Because inventory has increased while price growth has slowed, the 2026 market may favor buyers more than it has in recent years. This shift is especially meaningful for first-time buyers and move-up buyers who struggled during the tightest conditions.
Affordability Still Tight — But Slightly Better
Despite these improvements, affordability remains a challenge across Southern California. High home prices, elevated living costs, and slower wage growth continue to limit access for many households.
That said, forecasts point to incremental relief:
- Mortgage rates are expected to decline slightly in 2026.
- Inventory growth should provide more choices and reduce pressure.
- Statewide affordability indexes show modest improvement.
Although these changes will not create a dramatic turnaround, they do suggest gradual progress for Southern California buyers and renters alike.ke.
Top Industry Forecasts for the Real Estate Industry in 2026
The following forecasts are widely used by the largest real estate brokerages in the United States to guide agent strategy and client education for the real estate industry in 2026.
Realtor.com® 2026 National Housing Forecast
Realtor.com’s® economic research is widely cited by brokerages and agents across networks (including Keller Williams and RE/MAX agents when evaluating market trends):
- Mortgage rates expected to average ~6.3% in 2026 — slightly lower than in 2025.
- Existing-home sales are forecast to rise ~1.7% nationally.
- Median home prices are expected to rise ~2.2%.
- Home inventory may increase ~8.9%, continuing gains from prior years.
- The overall market is expected to be more balanced, with inventory growing faster than sales. Media | Move, Inc.+1
This forecast represents a less frothy and more sustainable market — something that most major brokerages reference to calibrate their own agent expectations and guidance.
Zillow Research 2026 Predictions
Zillow, whose research is frequently quoted by brokerages like Keller Williams, RE/MAX, Coldwell Banker/Berkshire Hathaway HomeServices, and others for national outlook guidance, projects:
- Home values will rise about ~1.2% in 2026.
- Existing home sales around ~4.26 million units — modestly higher than 2025.
- Rent growth slowing (just ~0.3%). Zillow
Zillow’s projections help shape how brokerage analytics teams forecast market activity and guide their agent forecasts.
National Association of REALTORS® (NAR) 2026 Housing Forecast
While NAR is not a brokerage, it is the largest professional trade association whose forecasts are foundational to brokerage business planning:
- NAR projects a double-digit increase (around +14%) in existing home sales in 2026 compared to 2025.
- NAR expects home prices nationwide to rise ~4%, supported by job growth and supply constraints.
- The forecast assumes higher inventory, modest rate relief, and more buyer activity. nar.realtor
Brokerage research teams frequently reference NAR forecasts for agent resources and client education.
What the Major Brokerages Typically Use for Their Forecasts (2026)
Below are the top 5 biggest brokerages in the U.S. (by sales volume or enterprise size) and how their insights tie into those authoritative forecasts:
1. Compass
✔ Official 2026 Market Outlook available publicly.
Forecast themes: balanced market, modest price growth, more inventory, rising sales. Compass+1
2. Anywhere Real Estate (Coldwell Banker, Century 21, Sotheby’s, etc.)
Anywhere Real Estate owns major franchise brands like Coldwell Banker and Century 21. While no single national 2026 forecast is published as a joint company outlook, agents affiliated with these brands use:
- Realtor.com forecasts
- NAR forecasts
- Zillow housing research
for their 2026 guidance because Anywhere focuses on local market trends productively tied to these national insights.
3. eXp Realty
eXp’s national market outlook comes from economists it partners with (often Zillow, Realtor.com, and NAR forecasts). eXp’s agent tools integrate these major forecasts into client messaging and strategy planning.
4. HomeServices of America / Berkshire Hathaway HomeServices
As the brokerage arm of HomeServices of America, Berkshire Hathaway HomeServices uses national forecasts like Realtor.com and NAR projections to advise agents across its network. BHHS also produces resort and luxury reports that tie into price and demand stability themes. bhhs.com
5. Keller Williams
Keller Williams does not publish a centralized 2026 forecast publicly, but its research agents and coaches consistently echo the major national trends:
- Slight improvement in affordability
- Inventory increases
- Slow price growth
- More balanced conditions
These insights align closely with Realtor.com, Zillow, and NAR outlooks referenced above. Brokerages like Keller Williams often roll them into agent-specific regional market forecasts.
Verified 2026 Outlook Themes from Major Brokerages
Across the largest U.S. brokerages’ outlooks and linked research forecasts:
✅ Sales Activity Expected to Rise
- Compass projects ~5% increase in sales. Compass
- NAR forecasts double-digit sales growth (~14%) in 2026. nar.realtor
✅ Modest Home Price Growth (Not a Crash or Boom)
- Realtor.com projects about +2.2% price growth. Media | Move, Inc.
- Zillow forecasts ~1.2% growth. Zillow
- Compass expects near-flat prices (0.5%). Compass
✅ Inventory Growth and Market Balance
- Realtor.com and Compass anticipate inventory growth (~8–10%). Media | Move, Inc.+1
✅ Affordability Improving Slightly
- Realtor.com forecasts lower payment share and modest affordability improvement. Media | Move, Inc.
✅ Mortgage Rates Moderating in the Mid-6% Range
- Realtor.com and Compass both project 6%+ average rates. Media | Move, Inc.+1
Conclusion
While individual brokerages like Keller Williams and RE/MAX do not publicly publish detailed 2026 national housing forecasts, their insights are strongly aligned with major industry forecasts from Compass, Realtor.com, Zillow, and NAR — all of which show:
🔹 A balanced market with moderate price growth,
🔹 Growing inventory,
🔹 Increased sales activity,
🔹 Slightly better affordability,
🔹 Mortgage rates easing modestly — not collapsing. Compass+3Media | Move, Inc.+3Compass+3
These data-driven forecasts are widely used by the biggest real estate brokerages to guide their agents and clients into 2026 with credible expectations and planning tools.