The couple, along with their 19-month-old son Archie, are gearing up to celebrate their first holiday season in California, and the family is "excited to decorate for Christmas," a source tells PEOPLE in this week's issue.
"They are very happy," the insider adds. "Archie is thriving and growing quickly. As a family, they spend hours outside."
In addition to celebrating Thanksgiving this week at their new home in Montecito, about 100 miles north of Los Angeles, the family also marked Halloween by taking Archie trick-or-treating. Meghan's mother, Doria Ragland, will likely join the trio for holidays.
Meghan was born and raised in Los Angeles, and she and Prince Harry moved to California in March to start their new lives after leaving their roles as senior working members of the royal family. The nine-bedroom mansion, purchased for a reported $14 million, is the family of three's "permanent home," a source previously told PEOPLE.
"Ever since Archie arrived, everything has been so turbulent, and many things have been up in the air," the insider said. "It has not been easy, necessarily. For the first time in a long time, they have a clear focus."
"They both love California, and Santa Barbara has a magic to it — the mountains, oceans, vineyards, flowers, gardens," said a source close to the couple. "It’s so beautiful."
Meghan and Harry suffered a difficult loss soon after their move the Montecito. And with the time of reflection around Thanksgiving, they decided to talk openly about their recent pregnancy loss, a source close to the couple told PEOPLE.
“Losing a child means carrying an almost unbearable grief, experienced by many but talked about by few,” Meghan wrote, recounting how she and Harry shared tears later as they comforted each other in a hospital room.
Christmas will look different for the entire royal family amid the ongoing coronavirus pandemic. Several events — including the annual Christmas lunch at Buckingham Palace in London — have been canceled as Queen Elizabeth isolates alongside husband Prince Philip at Windsor Castle.
The royal family usually convenes at the Queen's Sandringham estate for the holidays, participating in Christmas traditions like exchanging gifts on Christmas Eve and mingling with members of the public after attending morning church services.
"Christmas is something the Queen has always done with enormous, genuine family style and is facing not doing so, sadly," says royal historian Robert Lacey. Stoic as always, "she is accepting of that," he adds.
Can't get enough of PEOPLE's Royals coverage? Sign up for our free Royals newsletter to get the latest updates on Kate Middleton, Meghan Markle and more!
Last year, Meghan and Prince Harry opted to celebrate Christmas privately with Archie and Doria while spending time in Canada.
"Having spent the last two Christmases at Sandringham, Their Royal Highnesses will spend the holiday this year, as a new family, with the Duchess’ mother Doria Ragland," Buckingham Palace said in a statement at the time. "This decision is in line with precedent set previously by other members of the Royal Family, and has the support of Her Majesty The Queen."