Housing Market 2025 Recap & 2026 Expectations

Housing Market Updates! TAYLOR LAMBERT January 27, 2026

Santa Clara County’s real estate market has been on a pretty impressive run over the past few years, with only brief dips along the way. For single-family homes, the average sales price climbed from $1,992,471 in 2021 to $2,402,125 in 2025. That is a solid 20.6 percent gain in just five years.

This kind of growth really speaks to how resilient our market is. Inventory remains tight, demand is fueled by high-income jobs, and the desire to own real estate in Silicon Valley ain't slowing down anytime soon. If anything, it is still very much on fire.

So what about 2026? I think Santa Clara County real estate could be setting up for another huge year. One big reason? Midterm elections.

Looking back at roughly 50 years of US stock market history, midterm years tend to be more volatile early on, but they often finish strong with momentum building in the second half. Historically, they are not consistently down years overall. Translation? Silicon Valley buyers may end up with more buying power in their pockets as the year unfolds.

On the policy side, things are getting interesting. A new Fed chair and looser monetary standards may be taking shape. On January 8th, President Trump announced plans for Fannie Mae and Freddie Mac to purchase $200 billion worth of mortgage-backed securities. The market liked what it heard, and thirty-year mortgage rates dipped below 6 percent for the first time in nearly three years. Yeeeeeee!!!!

That wasn't the end of it. Trump has also expressed interest in Federal Reserve leadership modeled after Alan Greenspan, who served as Fed Chair from 1987 to 2006 and was known for prioritizing economic growth, often through lower interest rates. Consequences be damned? That is a conversation for another day.

The bottom line is that with anticipated policy shifts and strong fundamentals already in place, the upward trend looks like it still has room to run. That's how it all feels, anyway, in the Bay Area housing market. Let me know if you agree or think I'm nuts!