Merced Home Prices: $408K, Down 0.6% — 4 ZIPs Analyzed (2026)

$408,264. That’s what a typical home costs in Merced right now. Prices are down 0.6% from a year ago, but the city itself is growing faster than Sacramento, Fresno, and San Diego combined on a percentage basis.

Quick answer: The average home price in Merced, CA is $408,264 as of February 2026, down 0.6% year over year according to Zillow.

Current Home Prices in Merced

Merced sits well below California’s coastal markets. The typical home in the city is worth $408,264. A year ago, it was a hair higher.

The price spread across the four ZIP codes is wide. The cheapest neighborhood comes in at $359,692. The most expensive crosses $459,000. That’s a $100,000 gap in a city of fewer than 100,000 people.

The decline is small. Less than 1% in a year barely registers as a correction. But the trend matters more than the size. Merced peaked at $410,806 in March 2025 and has slipped almost every month since.

You won’t find a deal in the traditional sense. You will find a market that has stopped climbing for now. For buyers who watched California prices double in five years, a flat year is its own kind of opportunity.

The four ZIP codes here behave differently. The most expensive ZIP is up. The cheapest one is also nudging up. The middle of the market is flat to down. That mix is why the city average looks calm even when individual neighborhoods don’t.

Merced Home Prices by Neighborhood

Four ZIPs make up the Merced market. The price spread between them is 28%.

Most Expensive

95369 leads at $459,685, roughly $51,000 above the city median. 95348 sits at $413,397 with rents averaging $1,870. 95340 rounds out the upper half at $400,281, just below the city average.

Most Affordable

95341 is the cheapest at $359,692 — about 12% below the city median, even though its rent of $2,051 is the highest in town. That gap between low prices and high rents is unusual. 95340 is next at $400,281, where rents drop to $1,650. With only four ZIPs in the market, the bottom tier is small but the price gap is real.

Rent vs Buy in Merced

Renting looks better than buying right now in most Merced ZIPs.

The cheapest ZIP, 95341, has the highest rents at $2,051 per month. The priciest livable ZIP, 95348, rents for $1,870. ZIP 95340 sits at $1,650 a month.

Run the math on a $408,264 home. With 20% down at a 7% mortgage rate, the monthly principal and interest comes out near $2,170. Add property tax (roughly 1.1% in Merced County), insurance, and maintenance, and you’re at $2,800 to $3,000 a month before utilities.

Renting saves $700 to $1,150 a month over buying at the median. That gap pays for a lot of optionality. If prices keep drifting down, today’s renter is tomorrow’s buyer with a smaller mortgage.

The exception is anyone planning to stay 7+ years. Equity build-up and the prospect of refinancing into lower rates flip the math. Short-timers should rent. Long-timers can buy if they find the right ZIP.

Population Growth and Migration

Merced is one of the fastest-growing cities in California. The population grew from 87,019 in 2020 to 96,073 in 2024. That’s a 10.4% gain in four years.

That growth rate dwarfs every nearby California city.

Merced is growing more than three times faster than Bakersfield. More than seven times faster than Fresno. Roughly 17 times faster than Oakland.

Population growth usually pulls home prices up. Merced is the rare market where prices are flat to down even as residents pour in. UC Merced’s expansion is part of the story. So is migration from pricier Bay Area and coastal markets.

For buyers, the takeaway is simple. Demand is building. The current price softness may not last if construction doesn’t keep pace.

Merced Housing Market Trends

Prices peaked in spring 2025 and have softened almost every month since.

The market dropped from $410,806 in March 2025 to $404,721 in October — a $6,000 slide. Then it reversed. Prices have ticked up every month since October, gaining $3,500 across four months.

That pattern suggests the bottom of this small correction may already be in. The decline was modest, the rebound is gentle, and the city’s underlying population growth supports demand.

You’re looking at a market that took a small breath and is starting to climb again. Not a crash. Not a boom. A pause.

Is Merced a Good Place to Buy in 2026?

The data points to a balanced market with a slight edge for buyers.

Prices are down 0.6% year over year. They’re up about 0.9% over the last four months. Inventory and absorption rates aren’t in this dataset, but the gentle price action suggests neither side has the upper hand.

The case for buying: population is growing 10.4% over four years, prices are well below California’s coastal markets, and the recent trough already turned upward. Wait too long and you may pay more.

The case for waiting: rents undercut mortgage payments by $700+ per month at the median. The price recovery is small enough that you’re not missing a rocket ship.

If you plan to stay seven years or more, buy in 95341 or 95340 where prices are below average. If you plan to stay three or fewer, rent.

Merced Housing Market Outlook for 2026-2027

The 3-month trend points up. Prices climbed from $406,427 in December to $408,264 in February — a 0.5% gain in three months.

If the current pace continues, Merced could end 2026 with low single-digit annual gains. The October low looks like a floor. Population is still climbing. The supply side is the wild card no dataset can settle.

Watch the spring 2026 selling season. If prices crack the March 2025 peak of $410,806, the soft patch is over and Merced returns to growth. If they stall below that line, expect another flat year.

The cheapest ZIP, 95341, may move first. It carries the highest rents in the city, which usually signals strong tenant demand and eventual investor buying.

Similar Markets in CA

• Bakersfield — the closest large California city to Merced, with similar Central Valley pricing dynamics.
• Fresno — another Central Valley market that competes with Merced for migrating residents.
• Riverside — inland California pricing for buyers priced out of coastal metros.
• Fontana — comparable mid-tier California city for affordability shoppers.
• Long Beach — coastal contrast for buyers weighing price against location.

Frequently Asked Questions

What is the average home price in Merced?

The average home price in Merced, CA is $408,264 as of February 2026. That covers four ZIP codes ranging from $359,692 to $459,685. The city sits well below California’s coastal averages.

Are home prices going up or down in Merced?

Prices are down 0.6% year over year. They peaked at $410,806 in March 2025, slipped to $404,721 by October, then ticked up every month since. The 3-month trend is positive.

Is it cheaper to rent or buy in Merced?

Renting is cheaper. Median monthly rents run $1,650 to $2,051 across Merced ZIPs. Buying the median home costs roughly $2,800 a month all-in at current mortgage rates — a $700+ gap in favor of renting.

What is the most affordable neighborhood in Merced?

ZIP 95341 is the cheapest at $359,692, about 12% below the city median. Oddly, it also has the highest rents at $2,051 per month, which signals strong tenant demand despite low purchase prices.

Methodology

Home values are based on the Zillow Home Value Index (ZHVI), a smoothed measure of typical home values in the 35th to 65th percentile range. Rent estimates use the Zillow Observed Rent Index (ZORI). Population figures come from the U.S. Census Bureau Population Estimates Program (2020-2024 vintage). All datasets are publicly available. Housing data updated 2026-02-28.