California's housing market ended 2025 with a 0.9% sales increase and a slight price cooling, signaling stabilization. December saw 288,200 annualized home sales and a median price of $850,680, down 0.4% from November. Inventory growth slowed, and mortgage rates dropped to 6.19%. For 2026, sales are projected to rise 2%, median prices to reach $905,000, with improved affordability and inventory, despite economic and inflation challenges.