Sacramento Housing Market: Prices and Forecast 2025-2026

If you're thinking about buying or selling a home in Sacramento, or even just curious about what's happening with the Sacramento housing market, you've come to the right place. The Sacramento housing market in 2025 is showing signs of shifting, with a continued Seller's market for now, but some important trends to watch as we move through the year.

The good news is that by the end of 2025, we're likely to see a more balanced market, with a slight uptick in home values and sales activity across the nation, and Sacramento is expected to follow a similar, albeit more moderate, path. Let's start by looking at what's happening right now in the Sacramento housing market. It's important to remember that these numbers are based on September 2025 data from the Sacramento Association of REALTORS®, giving us a snapshot of how things are performing.

Sacramento Housing Market Trends 2025

Home Sales: Picking Up the Pace

It seems like more people are buying and selling homes in Sacramento. In September 2025, there were 995 property sales. This is a little more than last year (up 3.9% from 958 in September 2024) and just a tiny bit higher than the month before (up 0.2% from 993 last month).

On top of that, the number of homes that are under contract (meaning they've received an offer and are moving towards a sale) is also up. This is a really good sign for future sales! We saw a 9.3% increase in homes under contract compared to the previous month and a 5.2% increase compared to last year. This tells me that there’s still a good amount of interest in Sacramento homes.

Housing Inventory: More Choices for Buyers

One of the big stories this year is that there are more homes available for sale. Compared to last year, there were 22.1% more homes on the market in September 2025. That’s a significant jump! This means that buyers who might have felt frustrated by a lack of options in the past might find themselves with a bigger selection to choose from now.

However, this is a bit of a mixed bag. While the yearly number is up, the inventory did decrease by 5% compared to the month before. So, while you might have more options than last year, the selection might have tightened up a bit recently.

Sacramento Home Prices: A Mixed Bag

When it comes to home prices, things are a bit more nuanced. We’re not seeing a clear, steep climb or a drastic drop.

• Average Sold Price per Square Footage: This is a good indicator of true property value because it’s not as easily skewed by whether a lot of expensive or cheaper homes sold. In September 2025, this metric was up 1.2% from the previous month, but it was down 0.6% compared to last year. This suggests that while the value per square foot is holding steady or slightly improving month-to-month, it’s slightly lower than it was a year ago.
• Median Sold Price: This is the middle-ground price, where half the homes sold for more and half sold for less. The median sold price decreased by 1.8% from last month. Looking at the trend over the past six months, the Median Sold Price trend was “Depreciating”. This means that, on average, the median price has been going down.
• Average Sold Price: This is the total value of all homes sold divided by the number of homes sold. The average sold price increased by 1.3% from last month. However, the six-month trend for the Average Sold Price was “Neutral”, indicating it hasn't shown a consistent upward or downward movement over that period.

Table 1: Sacramento Home Price Trends (September 2025 vs. Previous Periods)

Metric	September 2025 vs. Last Month	September 2025 vs. Last Year	Six-Month Trend (Average Sold Price)	Six-Month Trend (Median Sold Price)
Average Sold Price per Sq Ft	+1.2%	-0.6%	N/A	N/A
Median Sold Price	-1.8%	-4.4%	Depreciating	Depreciating
Average Sold Price	+1.3%	-0.2%	Neutral	N/A
Average For Sale Price	-0.3%	-2.4%	N/A	N/A

Source: Sacramento Association of REALTORS®

These numbers tell us that while the average sale price might look up this month, the overall trend for median prices has been a bit downward. This is something for both buyers and sellers to consider.

Days on Market: Homes Taking Longer to Sell

One of the biggest indicators that the market might be cooling down is how long homes are sitting on the market. In September 2025, the average Days on Market (DOM) was 38 days. This is an increase of 11.8% from last month and a significant jump of 35.7% compared to last year, when homes were selling in an average of 28 days.

When homes take longer to sell, it usually means buyers have more time to consider their options and potentially negotiate. This is a classic sign that we’re moving away from a super-heated seller’s market towards something more balanced.

Sold Price vs. Original List Price: Sellers Offering More Incentives

The ratio of the sold price to the original list price tells us how much sellers are dropping their prices. In September 2025, this ratio was 97%. This means that, on average, homes are selling for 3% less than their original asking price. While this was the same as last month, it's a 1% decrease compared to last year. A ratio below 100% generally indicates a Buyer’s market, as sellers are willing to negotiate.

Understanding Market Conditions: Buyer's vs. Seller's Market

The months of inventory is a key metric here. It tells us how many months it would take to sell all the homes currently on the market if no new homes were listed.

• Seller's Market: Less than 3 months of inventory. Sellers have the upper hand.
• Neutral Market: 3 to 6 months of inventory. A balance between buyers and sellers.
• Buyer's Market: More than 6 months of inventory. Buyers have the advantage.

Based on the data:

• Months of Inventory based on Closed Sales: 2.3 months. This is up 15.1% from last year but down 8.1% from last month.
• Months of Inventory based on Pended Sales: 2.2 months. This is up 15.7% from last year and down 15.7% from last month.

Both of these figures (2.3 and 2.2 months) fall squarely within the Seller’s market range (less than 3 months of inventory). So, even though some indicators like Days on Market are pointing towards a shift, overall, Sacramento is still considered a Seller's market right now. This means sellers still have an advantage, and bidding wars, while maybe not as intense as before, could still be happening for desirable properties.

Sacramento Housing Market Forecast 2025-2026

Now that we’ve looked at the current trends, let’s peer into the crystal ball and see what the Sacramento housing market forecast looks like for the rest of 2025 and into 2026.

Sacramento's Near-Term Outlook (Late 2025)

According to Zillow's forecast, the average home value in the Sacramento–Roseville–Arden-Arcade area is currently around $574,751. This is down 2.2% over the past year. Homes are also pending in about 27 days, which is faster than the current trend of 38 days on market, suggesting a potential pickup in activity.

Zillow’s specific forecast for our region is as follows:

Table 2: Zillow's Sacramento Housing Market Forecast

Timeframe	Expected Home Value Change
October 2025	-0.1%
December 2025	-0.4%
September 2026 (1-Year Forecast)	-0.6%

What does this mean for Sacramento? It suggests that we might see a slight continued dip or flattening of home values through the end of 2025 and into early 2026. It’s not a dramatic crash, but rather a period of adjustment. This could be influenced by ongoing mortgage rates and the general economic climate.

Sacramento Compared to Other California Cities

It's always interesting to see how Sacramento stacks up against other major California cities. Zillow's forecast shows a bit of a mixed bag across the state:

Table 3: Zillow's California MSA Home Value Forecast Comparison

RegionName	October 2025	December 2025	September 2026 (1-Year Forecast)
Sacramento, CA	-0.1%	-0.4%	-0.6%
Los Angeles, CA	0.1%	0.3%	1.4%
San Francisco, CA	-0.1%	-0.6%	-2%
Riverside, CA	0%	0%	1.8%
San Diego, CA	-0.1%	-0.5%	1.6%
San Jose, CA	0.3%	0.6%	1.4%
Fresno, CA	0.2%	0.5%	1.8%
Bakersfield, CA	0.1%	0.4%	2.5%

As you can see, while Sacramento is projected to see a slight decrease in home values, many other parts of California, particularly Southern California and the Central Valley (like Fresno and Bakersfield), are expected to see modest growth. San Francisco, on the other hand, is forecasted to experience a more significant decline. This comparison suggests that Sacramento's market might be more stable than some of the priciest areas, but not as robust as certain growth markets.

National Housing Market Outlook (2025-2026)

Looking at the broader US market gives us more context. Both Zillow and the National Association of Realtors (NAR) have provided forecasts, and they generally paint a picture of recovery and gradual growth after a challenging period.

Zillow's Key Predictions for the US:

• Home Value Growth: After a flat period in late 2025, Zillow expects home value growth to recover in 2026, reaching a peak of nearly 1.9% by August 2026.
• Home Sales: The total number of home sales is predicted to end 2025 at 4.07 million, which is slightly better than 2024.
• Rents: Rental growth is expected to continue to cool down.

NAR Chief Economist Lawrence Yun's Key Predictions for the US:

NAR's Chief Economist, Lawrence Yun, is notably optimistic, suggesting “brighter days may be on the horizon.”

• Existing Home Sales: Expected to rise by 6% in 2025 and then accelerate by 11% in 2026. This signals a strong rebound in buyer activity.
• New Home Sales: Projected to climb by 10% in 2025 and another 5% in 2026. This growth is crucial for addressing the housing supply deficit.
• Median Home Prices: Forecasted to increase modestly, with a 3% rise in 2025 and 4% in 2026. This is a return to more sustainable price growth.
• Mortgage Rates: Anticipated to average 6.4% in the second half of 2025 and drop to 6.1% in 2026. Yun calls mortgage rates a “magic bullet” for the market, and a decrease in rates will significantly boost affordability and demand.

What This Means for Sacramento:

While Sacramento's short-term forecast might be a bit flatter than the national average, the national trends suggest that by late 2025 and into 2026, we should see a positive ripple effect. The expected decrease in mortgage rates nationally is a huge factor. As rates come down, more buyers will be able to afford homes, and this increased demand should help lift Sacramento’s market, too. The national increase in home sales also points towards a healthier overall real estate environment.

So, Will Home Prices Drop in Sacramento? Can it Crash?

Based on the current data and forecasts, a crash in Sacramento home prices is unlikely. The market is shifting from a red-hot seller’s market to a more balanced one, and home prices are expected to either stabilize or see very modest decreases in the short term.

Here’s my take:

• Short-term (Late 2025): We might see some continued downward pressure on prices, especially for homes that are overpriced or need work. However, the underlying demand in Sacramento, combined with a continued seller's market (low inventory), should prevent any drastic price drops. The Sold Price vs. Original List Price ratio of 97% suggests sellers are already adjusting.
• Mid-term (2026): As national trends show an uptick in home sales and a slight increase in home values, Sacramento is likely to follow suit. The projected drop in mortgage rates is a major catalyst. This could lead to a more active market with modest price appreciation, rather than a decline.
• Long-term (Early 2027): If the national trends of increasing sales and stable price growth continue, Sacramento should benefit. We might see a return to steady, sustainable home price appreciation in the low single digits, driven by ongoing demand and improving affordability due to potentially lower mortgage rates.

A “crash” usually implies a rapid and significant drop in prices, often due to major economic shocks or an oversupply of homes. While the market is correcting from its recent rapid run-up, the current data doesn't point to the conditions that typically cause a crash.

Possible Forecast for 2026 End and Early 2027

Looking ahead to the end of 2026 and early 2027, I anticipate the Sacramento housing market will be in a much healthier and more balanced state than it is right now.

• Home Sales: Expect more activity. With potentially lower mortgage rates and a more stable economic outlook, more buyers will likely enter the market. We could see a steady increase in both existing and new home sales, closer to or even exceeding national averages.
• Home Prices: We should see a return to modest, sustainable appreciation. Think along the lines of the 3-4% annual increases predicted nationally by NAR. This is a healthy level that allows homeowners to build equity without creating an unsustainable market. The Days on Market should start to decrease again as demand picks up.
• Housing Inventory: The housing inventory might increase slightly as more sellers feel confident listing their homes in a more stable market. However, it's unlikely to shift dramatically into a buyer's market, especially if demand continues to be strong.
• Buyer vs. Seller Market: The market will likely transition from the current Seller's market to a more balanced market by the end of 2026. This means that while sellers might still have some advantages, buyers will have more negotiating power and a better selection of homes.

In summary, the Sacramento housing market is navigating a period of transition. While September 2025 data showed a Seller's market with some signs of cooling, the forecasts for the coming year point towards stabilization and eventual modest growth. Keeping an eye on mortgage rates and economic news will be key to understanding how these trends play out.

Is Sacramento a Good Place to Buy a House?

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.