More would-be buyers “stepped back” in July, the latest evidence that many are worried about the economy and the housing market.
An adjusted annualized rate of almost 262,000 homes sold in July, a 1% decline from June and off 4.1% from a year ago, according to the California Association of Realtors.
The dismal housing market has endured four consecutive months of sales drops, with the first seven months of sales falling into negative territory at 0.4% for first time in six months. Also, the adjusted annualized rate has been below the 300,000 mark – considered the threshold for a healthy market – for 34 straight months.
ACTIVE LISTINGS JUMP TO 69-MONTH HIGH
In addition to economic concerns, largely because of tariff-prompted inflation and a jittery job market, would-be buyers are dealing with near-record-high home prices. However, slightly lower mortgages rates have helped make buying a bit more affordable during the past several weeks.
“The housing market experienced a modest slowdown in both sales and prices in July as some buyers stepped back, waiting for more certainty in the market and broader economy,” said CAR president Health Ozur, a Palm Springs-area REALTOR. “Encouragingly, mortgage rates have declined to their lowest level since last October, and that has already led to an increase in purchase applications. If this trend continues, we could see stronger buyer activity and renewed demand in the months ahead.”
The bad housing market is affecting buyers as well. Total active listings increased 38% compared to a year ago to an almost six-year high, according to CAR. But some homeowners are holding off selling with the slow-as-molasses market.
“Supply is starting to fall because prospective sellers are choosing not to list after seeing their neighbor’s home linger on the market or sell for below the asking price,” said Redfin senior economist Asad Khan. “Some existing sellers are pulling their homes off the market, opting instead to rent their house out or hold off on a move altogether, especially if they bought at the peak of the pandemic market and are worried about taking a loss.”
‘THE MARKET APPEARS TO BE COOLING OFF’
Now, a large majority of homeowners – even those who bought during the pandemic – are in the black, and many are considered equity rich, where they have more equity than mortgage debt on their property. Home prices are up significantly since summer 2020, but prices have struggled in recent months.
In July, California’s median-home price declined for the third consecutive month, falling to a five-month low of $884,050, a 1.7% drop from June and off 0.3% from a year ago (see table, below).
“With housing inventory reaching a plateau … the market appears to be cooling off slightly as home prices dipped for the third straight month,” CAR chief economist Jordan Levine said. “Even with recent price declines, California median home price could still see a modest annual increase in 2025, provided the market stabilizes in the coming months.”
That’s a big “if,” especially as the economy and the job market has become a much bigger concern for many would-be buyers.
Home prices and sales in July 2025 compared to a year ago
| Region | Median home price | % gain or loss vs. a year ago | Home sales vs. a year ago |
|---|---|---|---|
| California | $884,050 | -0.3% | -4.1% |
| Bay Area | $1.3 million | No change | -4.1% |
| Central Coast | $1.12 million | +4.9% | +1.7% |
| Central Valley | $500,000 | No change | -1.5% |
| Far North | $397,000 | +3.1% | +4.8% |
| Inland Empire | $589,020 | -1.8% | -5.4% |
| Los Angeles | $845,500 | -0.4% | -1.0% |
| Southern California | $875,030 | -0.7% | -1.7% |
Source: California Association of Realtors
