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The housing market is moving forward, but it is doing so with more intention, more selectivity, and less tolerance for hesitation. Here is what is happening right now and what it actually means if you are thinking about buying or selling.
Population Growth Slows
U.S. population growth dropped to its weakest pace since 2021, largely due to a sharp decline in net international migration. California’s population also declined, which could become a medium term headwind for housing demand if the trend continues.
For now, this is more of a long range signal than an immediate disruption, but it reinforces the idea that demand is becoming more localized and more quality driven.
Housing Fundamentals Remain Stable
The share of seriously underwater mortgages ticked up slightly nationwide but remains well below historical norms. California continues to post a low underwater rate, which significantly limits the risk of widespread distress or forced selling.
This matters because it means sellers are not under pressure to dump homes, and pricing power still exists when homes are positioned correctly.
Homeownership Edges Higher
The national homeownership rate rose modestly at the end of 2025, with the biggest gains among buyers under age 35. Even so, overall ownership remains below long term averages.
Younger buyers are entering the market carefully and strategically, often with help, strong planning, and a long term mindset.
Labor Market Sends Mixed Signals
January job cuts surged nationally to their highest level since 2009, signaling increased caution from employers. At the same time, California layoffs declined year over year, offering a more stable local outlook than the national headlines suggest.
This split reinforces why local market knowledge matters more than ever.
Consumer Sentiment Improves
Consumer sentiment rose for the third consecutive month, reaching a six month high. While job concerns have not disappeared, households are slowly regaining confidence and becoming more comfortable making long term decisions again.
Confidence does not mean reckless. It means prepared.
What This Means for Buyers
This market rewards readiness and clarity. Not waiting for perfect conditions, but buying the right home at the right price with confidence. The buyers who win are the ones who know their numbers, understand value, and act decisively when the right opportunity appears.
What This Means for Sellers
This is not a wait and see market. It is a price it right and execute well market. Homes that are positioned strategically, marketed properly, and priced with intention are still selling. Those that are not are sitting.
If you want to talk through what these trends mean for your specific situation or your neighborhood, I am happy to help. Reach out anytime at 831-331-5977 and let’s put a smart plan together that fits your goals.
