Southern California homebuying has crashed to its second-slowest pace in more than two decades, outpacing even the worst months of the Great Recession.
The 12-month period ending in July saw sales across six counties run 33% below the average annual pace recorded since 2005, according to an analysis by Los Angeles Daily News business columnist Jonathan Lansner. Lansner crunched newly revised figures from real estate data firm Attom, which updated its methods for identifying actual transactions in public records dating back to 2005.
July’s sales pace was 3% slower than during the worst stretch of the housing market collapse in the late 2000s. Of the 25 months with the fewest home sales over the past 21 years, 17 have occurred since 2023. Seven took place during the 2007-2008 financial crisis, while another came in May 2020, when pandemic restrictions froze much of the economy.
The only slower 12-month period on record was May 2026. Southern California’s housing market has now struggled for three straight years, with prospective buyers facing a brutal combination of near-record prices, elevated mortgage rates and economic uncertainty.
The median home price hit $815,000 in July, the fourth-highest figure ever recorded in the region and just 2% below its all-time peak. Those prices have pushed homeownership out of reach for the vast majority of households. According to the California Association of Realtors, just 15% of households in Orange County could afford to purchase a home this past spring. The figure was 17% in Los Angeles and San Diego counties, 19% in Ventura County, 28% in Riverside County and 34% in San Bernardino County.
A buyer purchasing a median-priced home faces an estimated monthly housing payment of $5,765, including mortgage payments, property taxes, homeowners insurance and mortgage insurance. That marks a 72% increase over five years.
Renting remains far cheaper. Zillow estimates show the typical monthly rent for a house or apartment in Southern California was approximately $2,860 in July, less than half the estimated monthly cost of purchasing a home.
The Federal Reserve’s decision to raise interest rates beginning in 2022 drove the surge in borrowing costs, following several years when mortgage rates had fallen to historic lows. The average rate on a 30-year fixed mortgage stood at 6.5% in July before climbing to 7.3% by mid-October. That increase alone reduced prospective buyers’ purchasing power by roughly 8%.
Buyers also need approximately $81,500 upfront for a 10% down payment on a median-priced home.
Since 2023, home values across Southern California have grown by approximately 2% annually, a significant slowdown from the 7% average annual increase recorded during the previous decade. That cooling trend presents its own challenge: buyers who once viewed real estate as an investment that would rapidly appreciate may now be less willing to make such a costly commitment.
The updated Attom data includes sales of both existing and newly built houses and condos across Los Angeles, Orange, San Diego, Ventura, Riverside and San Bernardino counties.
Mortgage rates are expected to remain a key factor shaping whether the market finds any footing in the months ahead.