San Jose housing market update: softer prices, tight supply
San Jose, CA – February 28, 2026 – Prices eased year over year, inventory stayed tight, and mortgage rates hovered near 6% heading into spring.
What to know right now
- Pricing is softer than last year: recent closed-sale metrics showed year-over-year declines, alongside longer marketing times.
- More choices than late 2025, but still limited overall: active inventory and new listings increased versus late 2025, yet supply remained tight for the region.
- Rates remain a swing factor for spring demand: mortgage rates near 6% are likely to influence affordability, buyer activity, and how quickly homes move.
Market snapshot (January 2026)
January 2026 results pointed to a slower pace compared with the same time last year. The median sale price was about $1.255M (down 10.7% year over year). Homes sold in around 31 days on average, and there were 220 homes sold for the month (down 26.4% year over year).
On the valuation side, Zillow’s typical home value measure was about $1.401M through January 31, 2026 (down 2.8% year over year). Inventory data from the same date showed 818 homes for sale and 294 new listings. Zillow also reported homes going pending in about 18 days, suggesting that well-positioned listings can still attract quick interest even as year-over-year pricing eases.
Rentals & financing
For rentals, Zillow’s city rent index was about $3,219 as of January 31, 2026 (up 4.3% year over year). On financing, Freddie Mac’s PMMS showed the average 30-year fixed rate at 6.11% as of February 5, 2026.Â
In the pipeline
In the county affordable/supportive housing pipeline, projects listed as under construction include Hawthorn Senior Apartments (estimated completion: March 2026) and The Fielden (estimated completion: April 2027).
What are you seeing right now: more price reductions, more bidding wars, or more investors in the mix?