A recent report from the California Association of Realtors (C.A.R.) revealed that the Golden State is gradually becoming the “Million Dollar State.” A large share of homes sold across the state of California end up selling for more than $1 million.
The state’s median home price, which represents the middle of the pricing spectrum, could surpass $1 million within the next two years.
The state-wide housing market continues to show resilience in 2026, with rising California home sales and prices. That’s based on the latest housing market update and assessment from the state’s Realtor association.
The San Francisco Bay Area saw the largest increase in home prices in California over the past year. The median house value in the San Francisco-Oakland-Hayward metro area has been above the $1 million threshold since 2020.
Home prices in California continue to rise, and some forecasts predict that trend will continue through 2026.
Inventory has a lot to do with these trends and forecasts.
The C.A.R. report mentioned above stated that housing market inventory in California has “started to increase.” That’s great news for future home buyers. But overall, there’s still a shortage of homes relative to the number of buyers in the California housing market in 2026, and that puts upward pressure on prices.
Also, despite higher mortgage interest rates compared to a few years ago, the real estate market remains strong. In many parts of California, sellers can generate multiple offers within the first few days of coming onto the market.
For those who already own a home in the Golden State, it might be nice to sit back and watch your equity levels continue to grow. But for those who are planning to buy a home in California later this year or next, these trends highlight the challenges they might face.
Clearly, not everyone in California can afford to buy a home. Far from it. According to affordability data collected by C.A.R., only about 31% of first-time buyers could afford to purchase an “entry-level” home during the first quarter of this year.
The down payment represents the biggest challenge for most home buyers, especially with so many million-dollar homes in California.
But many people are in a situation where they could afford the monthly mortgage payments that come from homeownership, but need help getting past the down payment obstacle. If you fall into this group, keep reading below!
Here are some strategies that can help California home buyers clear the down payment hurdle:
This might seem obvious, but creating a realistic budget and cutting back on unnecessary expenses can significantly increase your down payment savings. And the sooner you start, the sooner you’ll reach your goal.
There are various programs that offer down payment assistance in California for first-time home buyers and low-to-moderate income earners. These programs can provide grants or low-interest loans to help reach your down payment goals. The California Housing Finance Agency (CalHFA) website is a good place to begin your research.
Surveys have shown that a lot of home buyers believe they have to make a down payment of 20%. But there are mortgage programs available that allow for a much smaller upfront investment. For example, the FHA loan program allows California home buyers to purchase a house with a down payment as low as 3.5%.
If possible, explore gifts from family members to go towards the down payment. Many loan programs allow the use of “gift money” from an approved third-party donor. This applies to FHA, VA and conventional mortgage loans.
In California, home buyers who purchase properties above the $1 million threshold often have to rely on jumbo mortgage financing. A jumbo loan is one that exceeds the government-imposed conforming loan limit for the county where the home is located.
Jumbo loans in California typically require larger down payments and a stronger credit history, when compared to their smaller “conforming” counterparts. That’s because there’s a higher level of risk for the lenders that offer these loans.
But in the Golden State, where more than a third of all California home sales top a million dollars, the jumbo mortgage is often the best tool for the job.
Are you thinking of buying a home in California? Sammamish Mortgage offers jumbo mortgage financing well above the $1 million mark. We also deliver competitive rates and a level of transparency you won’t find with most lenders. We offer several mortgage loan options to choose from, and service clients across California, Washington, Idaho, Oregon, and Colorado. Get an instant rate quote and contact us if you want to get pre-approved for a mortgage in the Golden State.
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