California’s housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to C.A.R.’s “2016 California Housing Market Forecast,” released late last week at CALIFORNIA REALTOR® EXPO in San Jose.
The C.A.R. forecast sees an increase in existing home sales of 6.3 percent next year to reach 433,000 units, up from the projected 2015 sales figure of 407,500 homes sold. Sales in 2015 also will be up 6.3 percent from the 383,300 existing, single-family homes sold in 2014.
The average for 30-year, fixed mortgage interest rates is expected to rise only slightly to 4.5 percent but will still remain at historically low levels.
The California median home price is forecast to increase 3.2 percent to $491,300 in 2016, following a projected 6.5 percent increase in 2015 to $476,300. This is the slowest rate of price appreciation in five years.