California’s homebuying collapse is far different than the nation’s sales dip.
My trusty spreadsheet looked for clues in 21 years of sales stats from Attom, tracking closed deals for houses and condos, existing and newly constructed. The deep reluctance of house hunters to buy in 2023 and 2025 was compared with the ugliness of the 2007-2009 debacle.
Consider how far statewide sales have fallen recently.
California had 954,423 sales in 2023 -25, down from 1.25 million in 2007-09. So, homebuying was 24% slower over the past three years than during the housing nightmare. Yes, there are far fewer homebuyers these days than during the big crash.
However, the 12.4 million sales nationwide in 2023-25 were 13% higher than the 10.9 million in 2007-09.
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Next, contemplate contrasting swings in home prices – noting the difference in the housing market’s economic backdrop: from the recent post-pandemic economic unrest to the 2007-09 global financial meltdown.
California’s $710,000 median home price for December 2025 was 9% higher than three years earlier – and just 5% below its all-time high.
Curiously, the nation’s year-end price of $372,000 came after a 16% jump in three years. And it was a record high.
This recent pricing is far different than what occurred during the Great Recession.
California’s price collapsed 45% in the three years ending in December 2009. Nationally, it was a 25% drop.
The monthly payment
Now, let’s talk affordability. For starters, think about the gyrations of mortgage rates.
Over the last three years, the Federal Reserve battled surging inflation by raising interest rates. Freddie Mac’s average 30-year mortgage rate rose from 6.3% at the start of 2023 to 7.6% – then dropped to 6.2% by December 2025 as inflation finally cooled.
Back in the Great Recession, the Fed juggled a worldwide economic disaster. Loan rates fell from 6.2% in January 2007 to as low as 4.8% as the financial crisis spiraled out of control. The rate was 4.9% in December 2009.
Finally, ponder a typical buyer’s estimated monthly house payments.
Meld those rate swings with price moves, and you see a key difference in the home-shopping climate during these two periods.
A California house hunter’s financial burden rose 4% in the past three years, while house payments tumbled 52% in 2007-09. Nationally, payments jumped 11% over the past three years, after slipping 35% during the Great Recession.
It’s those deep discounts that got house hunters into a buying mood as the big crash unfolded.
Also, note the sharp decline in the first-time buyer affordability index from the California Association of Realtors.
This cost benchmark shows that, on average, 30% of California households could qualify for a starter home in 2023-25, down from 49% in 2007-09.
Nationally? 54% could afford to buy recently vs. 71% in the Great Recession.
What’s next?
Does the pain of 2007-09 offer any hints about how quickly homebuying can shake off significant blows?
Even with dramatically better affordability, rebounds from the Great Recession’s troubles were lethargic.
Over the next three years, California sales grew by 8% while home prices recovered by 15% through the end of 2012.
Nationally? Sales fell 4% as prices rose 3%.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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