Rising tensions in the Middle East are pushing up gas prices and could soon drive higher grocery costs nationwide.
Now, those ripple effects are beginning to reach California’s housing market, according to real estate experts.
“The conflict in the Middle East is creating some uncertainty for the broader economy and financial markets, which could lead to some short-term hesitation in the housing market,” Tamara Suminski, California Association of Realtors president, said in a Tuesday, March 17, housing report.
The housing market picked back up in February, with both home sales and prices rising steadily, according to the Realtors group’s latest home sales and price report.
Existing home sales reached a seasonally adjusted annual rate of 274,820 in February.
That’s up 7% from January, when 256,550 existing homes were sold in California, but 0.3% lower than the 275,600 homes sold in February 2025.
However, Suminski said, the war in Iran could have negative effects on real estate prices, mortgage rates and home sales in the near future.
“We remain hopeful though that the situation will stabilize in the weeks ahead, allowing market fundamentals and buyer and seller confidence to reassert themselves,” Suminski said.
Here’s what to know about current mortgage rates, average home prices and where to find the lowest-priced properties:
Conflict in Iran could have negative effects on real estate prices, mortgage rates and home sales in the near future, according to experts. Justin Sullivan Getty Images What are current home prices in California?
According to the California Association of Realtors’ February homes sales and price report, the statewide median home price in February was $830,370.
That is about a 1% increase from $822,630 in January, and up from $829,060 this time in 2025.
“While prices are expected to climb as the market approaches the spring homebuying season, lingering concerns about the broader economy and the market condition could constrain the pace of price gains in the months ahead,” the Realtors group said.
Mortgage rates rise in California
As of Friday, March 20, the average 30-year fixed mortgage rate in California was about 6.38%, according to Zillow.
“While mortgage rates remain below year-ago levels, they recently jumped to their highest level in seven months and could temper buyer momentum as we head into the spring homebuying season,” said Jordan Levine, California Association of Realtors senior vice president and chief economist.
Mortgage rates have increased 0.5% from February’s 5.88%, according to previous data.
Although the California Association of Realtors previously forecast rates to stay below 6% in 2026, recent global events have changed that outlook.
Real estate experts said mortgage rates have climbed once again due to “escalating geopolitical instability and renewed inflation fears,” driven by the ongoing war in Iran.
“However, many homeowners remain locked in to historically low rates, and inventory remains tight, so any stabilization in rates could help bolster home prices in the spring market despite ongoing affordability and economic challenges,” Levine said.
Where can I find lowest home prices in California?
The most affordable homes in the state can primarily be found in Northern California, according to the latest report from the California Association of Realtors.
Based on the February 2026 home sales and price report released March 17, these 10 counties had median home prices below the statewide average of $830,370:
Lassen County — $199,000Siskiyou County — $285,000Tehama County — $323,630Del Norte County — $335,000Lake County — $338,950Kings County — $356,990Tuolumne County — $362,500Glenn County — $370,000Trinity County — $374,250Tulare County — $381,000 
As of Friday, March 20, the average 30-year fixed mortgage rate in California was about 6.38%, according to Zillow. Getty Images Where do homes cost the most in California?
The Bay Area continues to be the most expensive region to buy a home in California.
In February, the median price for a single-family home in the region reached $1,285,000.
The five counties with the highest median prices for existing single-family homes were:
San Mateo County — $2,250,000Santa Clara County — $2,016,000San Francisco County — $1,976,000Marin County — $1,575,000Orange County — $1,432,500How much do homes cost in my California county?
Find the full list of home prices by county on the California Association of Realtors website.
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Angela Rodriguez is a service journalism reporter for The Bee. She is a graduate of Sacramento State with a bachelor’s degree in journalism. During her time there, she worked on the State Hornet covering arts and entertainment.