California home prices fell for the second month in a row this June, dropping below $900,000 for the first time since March. The state’s median home price slipped to $899,560, a 0.1% decline from both the previous month and the same time last year.
Typically, June sees a price increase of around 0.8%. This year’s decrease suggests that market conditions—including high mortgage rates and cautious buyer behavior—are outweighing seasonal trends. The recent movement in prices marks a potential turning point in the 2025 housing market.
“Price softening in June diverges from historical patterns,” stated the California Association of Realtors in a recent market update. “The combination of rising rates and buyer uncertainty continues to weigh on overall demand.”
Mortgage Rates and Inventory Influence Prices
The latest price decline comes amid ongoing challenges for buyers. Mortgage rates, which have increased steadily over the past several weeks, continue to limit affordability for many households across the state. This pressure is particularly noticeable in markets with already high prices.
At the same time, housing inventory is gradually expanding. That shift is giving buyers more options and prompting sellers to adjust expectations. Local agents report more homes staying on the market longer and fewer instances of multiple offers.
Statewide pending sales fell for the seventh straight month in June and posted the largest year-over-year drop since January. These indicators suggest continued hesitation in the buyer pool and support the recent data showing that California home prices fall under changing market dynamics.
Peak Home Prices May Be Over
While prices remain high compared to historical norms, there is growing evidence that the market has already reached its 2025 peak. If sales activity remains soft and inventory continues to grow, prices may see additional downward pressure through the second half of the year.
Even with the back-to-back monthly declines, California is still on track to register a modest year-over-year gain in home values by December. But that growth is likely to remain in the single digits and heavily influenced by regional conditions.
In communities like El Monte, Baldwin Park, and South El Monte, buyers are watching both prices and interest rates closely. Agents across the San Gabriel Valley report slower movement and more selective buyers, particularly among first-time homeowners and families seeking affordability.
Buyers Gain Leverage in the San Gabriel Valley
With California home prices falling in recent months, buyers in the San Gabriel Valley are starting to gain leverage. Sellers are more likely to offer concessions or adjust list prices, especially for homes that have remained unsold for several weeks.
“Buyers are still out there,” said one local broker, “but they’re more cautious than last year. They want to make sure the numbers work—and they have more room to negotiate now.”
If mortgage rates stabilize or decline in the coming months, the region could see renewed activity. Until then, both buyers and sellers are navigating a market in transition, marked by softening prices, increased supply, and economic uncertainty.
More information about market conditions, price trends, and housing data can be found on the California Association of Realtors website.
