California’s housing market will likely cool in 2006, with sales declining slightly from this year’s record pace, according to a forecast Wednesday by the California Association of Realtors.

The “2006 Housing Market Forecast” predicts that the median sales price statewide will increase 10 percent in 2006, to $575,500, compared with a projected median of $523,150 in 2005. California’s sales volume next year is forecast to dip 2 percent to 630,610 transactions, CAR said. Home sales for California in 2005 should reach a record 643,480 units, surpassing the prior sales record of 624,740 set in 2004.

CAR said continuing price increases will be driven by a shortage of housing across the state. California typically gains nearly 250,000 new households, yet only will build about 200,000 new housing units this year, creating a shortfall of about 50,000 units.

“We expect the fixed mortgage interest rate to rise to 6.4 percent next year, and the adjustable rate to hit 5.1 percent, which will make it more difficult for many families in California to be able to afford a home,” said C.A.R. President Jim Hamilton.

With higher rates and continued appreciation of home prices, only about 15 percent of Californians will be able to afford a median-priced house, said Hamilton. That’s down from 17 percent in 2005. This affordability barrier is expected to continue to push residents inland and to neighboring states.

The forecast did not include predictions for individual metro areas.