California home prices just reached a new record high

The median price of a single-family home climbed to $904,210 last month, nearly 6% higher than March and 11% above April 2023, according to data released on Friday by the California Association of Realtors.

Home sales also increased month over month and year over year by low single-digits.

"Both sales and prices are going up despite all the speed bumps that we've had along the way with the Federal Reserve and rates going up, which is hurting purchasing power," said Jordan Levine, the association's chief economist.

On Friday, the average fixed-rate, 30-year mortgage was 7.02%, roughly three-quarters lower than October 2023 but still significantly above the historic lows of two to three percent seen during the COVID-19 pandemic.

"The supply issue is probably worse right now because we have so many people locked into those low rates. So even as rates come down a little from the mid-sevens to the high sixes, you see that demand start to pick back up, and it pushes those prices up," Levine said.

According to CAR, the median home price in metro Los Angeles hit $840,000 in April, also a record.

California's Central Coast ($1,077,500), Central Valley ($493,500) and the Inland Empire ($607,00) also reached new highs.

California's affordability crisis is well documented, and experts point to high housing costs as one of the key contributors. This makes owning a home in the Golden State, particularly in major metropolitan areas, a good investment. However, Levine says the barrier to entry is becoming increasingly high due to the housing shortage.

"Wherever you go in the state, we're not building enough. There are certain areas that are a little more friendly to new development. But across the board, we've seen incredible job and population growth over the last 20-25 years … We've got a lot of housing to build no matter where we're talking about."