Let's discuss the current trends in the Sacramento housing market. Here's the short answer: it's still a seller's market, but things are starting to shift. While home prices have slightly increased, the number of homes for sale is also up, giving buyers a little more breathing room.
Nestled in the Central Valley region of California, Sacramento County boasts a thriving and dynamic housing market. As one of the most populous counties in the state, it offers a diverse range of opportunities for homebuyers and investors alike. Sacramento's housing market stands out compared to other California cities.
Fueled by a strong job market and a steady flow of residents, Sacramento has become a magnet for homebuyers. Let's dive into the details and see what's really going on.
Sacramento Housing Market Trends: What's Happening Now?
Home Sales
One of the most important things to look at is how many homes are actually being sold. In June 2025, 920 properties were sold in Sacramento. While this might sound like a lot, it's actually down 4.3% compared to June of last year (when 961 homes were sold), and down 8.4% from last month. So, fewer homes are changing hands than before.
Home Prices
Now, let's get to the question everyone wants to know: how much are homes costing? Here's a breakdown:
- The average sold price in June 2025 was $620,000. That's up 0.5% from last year ($617,000) and up 1.6% from last month ($610,000).
- The median sold price was $550,000, which is the same as last month and down 1.8% from June 2024.
- The average sold price per square foot was $347. It's remained the same as last month, but is up 0.9% from June last year, which was at $344.
Are Home Prices Dropping?
Not necessarily. While the median sold price has dropped a bit year-over-year, the average sold price is still climbing. So it depends on how you look at it. According to the Sacramento Association of REALTORS®, based on a 6-month trend, the average sold price is trending toward appreciation, while the median sold price is depreciating.
Housing Supply
This is where things get interesting. The number of homes for sale in Sacramento has increased dramatically. In June 2025, there were 2,430 listings, a 46.1% jump compared to June 2024 (which had 1,663 listings). It's up 6.7% compared to May 2025. This increase in inventory is good news for buyers! It means more choices and potentially less competition.
Is Sacramento a Seller's Housing Market?
This is the million-dollar question. To answer it, we need to look at the months of inventory (MOI). MOI tells us how long it would take to sell all the homes on the market at the current sales pace.
Here's a general guideline:
- Buyer's Market: More than 6 months of inventory
- Neutral Market: 3-6 months of inventory
- Seller's Market: Less than 3 months of inventory
In June 2025, Sacramento had 2.6 months of inventory based on closed sales, which is up 52% compared to last year. Based on pended sales, the MOI is 2.3 months, up 36.3% compared to last year. Both these numbers tell us that it's still a seller's market because inventory is less than 3 months. Sellers have the upper hand here, but with the increase in inventory, it's becoming less skewed in their favor.
Market Trends
Here's a quick summary of the current market trends in Sacramento, drawing from the most recent data:
| Category | June 2025 vs. May 2025 | June 2025 vs. June 2024 |
|---|---|---|
| For Sale | Up 6.7% | Up 46.1% |
| Sold | Down 8.4% | Down 4.3% |
| Pended (Under Contract) | Up 1.3% | Up 4.5% |
| Avg. Sq. Ft. Price (Sold) | 0% | Up 0.9% |
| Avg. Days on Market | Up 11.5% | Up 26.1% |
| Sold/Original List Price Diff. % | Down 1% | Down 1% |
| Avg. Active Price | Down 2% | Down 5.6% |
| Avg. Sold Price | Up 1.6% | Up 0.5% |
| Months of Inventory (Closed Sales) | Up 13.2% | Up 52% |
Impact of High Mortgage Rates
Let's not forget about mortgage rates. They play a huge role in what's happening in the housing market. As of July 31, 2025, the average 30-year fixed mortgage rate is hovering around 6.72%, while a 15-year fixed rate is around 5.85%, according to Freddie Mac.
These rates are definitely higher than what we've seen in recent years, but they've been stable lately. Experts predict the 30-year fixed rate will fall between 6.0 to 6.5% by the end of 2025. That stability is good because it helps buyers and sellers plan.
My Thoughts and What It Means for You
From my perspective, the Sacramento housing market is at a turning point. The increased inventory is a welcome sign for buyers who have been struggling with limited options. However, mortgage rates are still a significant factor. The increase in interest rates has caused some buyers to pause which in turn is balancing out the market.
Is Sacramento a Good Place to Buy a Home in 2025?
The decision to buy a home is deeply personal and depends on individual financial situations, lifestyle preferences, and long-term goals. However, here are some factors that make Sacramento an appealing place to call home:
- Relatively Affordable: While not as affordable as it once was, Sacramento still offers a more attainable cost of living compared to the Bay Area and Southern California, especially in terms of housing.
- Strong Job Market: Sacramento boasts a diverse economy with job opportunities in government, healthcare, education, and technology. The presence of major employers like UC Davis and state government agencies provides stability.
- Quality of Life: Known for its sunny weather, access to outdoor recreation, and vibrant cultural scene, Sacramento offers a high quality of life that continues to attract new residents.
- Central Location: Situated within driving distance of the Bay Area, Lake Tahoe, and the Napa Valley, Sacramento provides convenient access to some of California's most desirable destinations.
Renting vs. Buying in Sacramento: Weighing Your Options
The age-old debate of renting versus buying is particularly relevant in a market like Sacramento, where affordability is a key consideration.
Renting:
- Flexibility: Renting provides flexibility, allowing you to move more easily without the commitment of homeownership.
- Lower Upfront Costs: Renting typically requires a lower upfront investment compared to buying, as you don't need a down payment or closing costs.
- No Maintenance Responsibilities: As a renter, you are generally not responsible for property maintenance or repairs.
Buying:
- Building Equity: Mortgage payments gradually build equity in your home, providing a potential return on investment over time.
- Tax Advantages: Homeownership offers potential tax deductions for mortgage interest and property taxes.
- Stability and Control: Owning a home provides stability, a sense of community, and the freedom to customize your living space.
Sacramento Housing Market Forecast 2025-2026: Will Prices Drop?
Thinking about buying or selling a home in Sacramento? You're probably wondering what's going to happen with home prices. Here's the short answer: While Sacramento's real estate market has seen some cooling off, experts predict a continued, albeit modest, decline over the coming months and year.
As of now, the average home value in the Sacramento-Roseville-Arden-Arcade area sits at $589,047. This is down 1.2% over the past year, showing that prices have been adjusting a bit. Homes are also taking around 16 days to go pending, indicating a slightly slower pace compared to the crazy frenzy we saw a couple of years ago.
Sacramento Home Price Forecast
Let's look at what Zillow is predicting for the Sacramento housing market in the near future:
| Timeframe | Predicted Change in Home Value |
|---|---|
| July 2025 | -0.7% |
| September 2025 | -2.1% |
| June 2025 – 2026 | -3.7% |
Essentially, Zillow anticipates a gradual decline in Sacramento home values over the next year.
How Does Sacramento Compare to Other California Markets?
It's helpful to see how Sacramento stacks up against other major California cities:
| Region | Predicted Change (June 2025 – June 2026) |
|---|---|
| Sacramento, CA | -3.7% |
| Los Angeles, CA | -1.3% |
| San Francisco, CA | -6.1% |
| Riverside, CA | -0.9% |
| San Diego, CA | -1.5% |
| San Jose, CA | -4% |
| Fresno, CA | -1.2% |
| Bakersfield, CA | -0.1% |
As you can see, Sacramento's projected decline of 3.7% is more significant than some Southern California markets like Los Angeles and Riverside, but not as steep as the anticipated drop in San Francisco or San Jose. From my experience, this could be due to a combination of factors, including affordability compared to the Bay Area and continued demand from people seeking a reasonable cost of living within California.
National Trends and Expert Opinions
What's happening on a national level? Lawrence Yun, the Chief Economist for the National Association of Realtors (NAR), is cautiously optimistic. He forecasts:
- Existing home sales to rise by 6% in 2025.
- New home sales to climb by 10% in 2025.
- Median home prices to increase by 3% in 2025.
- Mortgage rates to average 6.4% in the second half of 2025 potentially dropping to 6.1% in 2026.
While Yun's national forecast is more positive, remember that local markets behave differently. His emphasis on mortgage rates as a “magic bullet” is key, though. Lower rates would definitely boost buyer demand, even in Sacramento.
Sacramento Housing Market: What Can we expect for 2026?
It's unlikely we'll see a major housing market crash in Sacramento. A moderate dip seems to be the more probable scenario. For 2026, if mortgage rates do come down as predicted by NAR, we could see the Sacramento market stabilize and potentially even experience a slight rebound. Supply and demand dynamics will also play a crucial role. And it is subject to change depending on various financial, technological and geopolitical situations.
The Bottom Line for Sacramento
The Sacramento housing forecast points to a period of continued price correction. This means if you're a buyer who's been waiting on the sidelines, you might find some better deals in the coming months. If you're a seller, it's important to be realistic about pricing your home competitively. The market isn't what it was a year or two ago and you might not get the same offers.
Overall, for the Sacramento housing market, it is critical to be updated with the latest news and consult with real estate professionals for updated news and data.
Should You Invest in the Sacramento Real Estate Market in 2025?
When considering whether buying a house in Sacramento is a good investment, it's crucial to examine various factors that contribute to the real estate market's attractiveness. Let's delve into the key aspects to help you make an informed decision.
Sacramento Rental Property Market
One of the key indicators of a strong real estate market is the demand for rental properties. In Sacramento, the rental property market has been robust, with a growing number of individuals and families looking for quality housing. This demand is driven by various factors, including the city's growing job market and its appeal as a place to live.
Investing in a rental property in Sacramento can provide a steady income stream, especially if you choose the right location and property type. It's essential to research neighborhoods and assess rental rates to ensure your investment is profitable.
Sacramento's Cost of Living & Quality of Life
Sacramento boasts a relatively lower cost of living compared to many other major California cities. This makes it an attractive destination for individuals and families looking for affordable housing options and a good quality of life.
The city offers a diverse range of amenities, including parks, cultural attractions, and a vibrant culinary scene. Sacramento's pleasant climate and proximity to outdoor recreational activities also contribute to its high quality of life.
These factors not only make it an attractive place to live but can also drive property value appreciation over time, enhancing the potential for a return on your investment.
Sacramento's Diverse Job Market & Economic Growth
Sacramento's job market has shown considerable growth in recent years. The city is home to a diverse range of industries, including healthcare, government, technology, and education. The presence of government agencies, such as the California State Government, further stabilizes the job market.
A strong and diverse job market can positively impact the demand for housing. Job opportunities attract professionals and families to the area, driving both rental and home purchase markets.
Population Growth of the Sacramento Metro Area
Population growth is a significant factor in the real estate market's health. The Sacramento metropolitan area has been experiencing steady population growth, driven by its economic opportunities and quality of life. An increasing population can lead to higher demand for housing, potentially driving property values upward.
Real Estate Appreciation Trends
One of the primary reasons why buying a house in Sacramento may be a good investment is the city's history of real estate appreciation. Over the past decade, Sacramento has experienced consistent and significant property value appreciation. This trend can be attributed to several factors, including an increase in demand for housing, a limited housing supply, and Sacramento's growing appeal as a desirable place to live.
Investors and homeowners who purchased properties in Sacramento a few years ago have witnessed substantial gains in their property values. While past performance does not guarantee future results, this trend is a positive indicator for potential real estate investors.
Investment Property Tax Benefits
Investing in real estate in Sacramento can offer tax benefits that make it an even more attractive investment. These benefits can include deductions for mortgage interest, property taxes, and depreciation. Be sure to consult with a tax advisor to understand how these deductions can positively impact your overall financial picture.
Resilience in Economic Downturns
During economic downturns, real estate in Sacramento has demonstrated resilience. While property values may experience fluctuations, the city's diversified economy and government stability have often shielded it from severe declines seen in other areas. This stability can provide a sense of security for investors concerned about economic uncertainties.
Other Factors
Other factors that contribute to the attractiveness of Sacramento's real estate market include:
- Transportation Infrastructure: Sacramento benefits from a well-developed transportation infrastructure, including highways and an international airport, making it accessible to residents and businesses.
- Education: The city is home to reputable educational institutions, including universities and colleges, making it an appealing location for students and academics.
- Cultural and Recreational Opportunities: Sacramento offers a rich cultural scene, with museums, theaters, and historic landmarks, providing diverse recreational opportunities for residents.
Consulting Real Estate Professionals
To make a well-informed decision, it's highly recommended to consult with real estate professionals who are knowledgeable about the Sacramento market. Real estate agents, appraisers, and property managers can provide insights into current market conditions, trends, and specific investment opportunities.
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