Sacramento Real Estate Market Update – 2025 Recap

Well, 2025 is over and we’re entering into ’26 with new resolutions and excitement. So what really happened in 2025? Let’s take a look.

New Home Market

BIA members reported selling 5,747 homes in the eight-county region during the year, down 18% from 2024 but still 8% higher than 2019. Sales surged during the pandemic era as remote work expanded, migration into the region increased and mortgage interest rates fell to historic lows, at times dipping to below 3%.

The BIA noted that housing experts at the recent housing forecast event predicted the worst of the slump was behind us and that sales will gradually pick up during the next three years.

Affordability remains a challenge in the region and local governments are making that worse. The BIA just finished a major study of fees in the region. This number may shock you, but the average sum of permit fees to build a home in the region averages $109,000 per home! Compare that to $3,000 to $5,000 per home in states like Texas and Tennessee.

This is a big math problem that won’t be solved anytime soon.

Let’s get into what happened in the resale market in ‘25

Average Home Price

Based on data from Trendgraphix, the average price for a Sold home in 2025 for the 4-County Region was up 0.9% to $676,000. And the Active Price was up 2.1% to $827,000. What felt like a rough year, was relatively normal and flat as far as prices went.

Average Price Per Square Foot

The average price per square foot in the region was flat at $342, compared to last year.

Number of Homes Sold

A total of 18,599 homes were sold in ‘25, up 0.5% from ‘24. Pending sales also increased slightly to 18,779 or an increase of 0.6% compared to ‘24. Again nothing really major happened in ’25.

Days On Market

This is where we saw the biggest change and where it felt like the market was worse than is actually was. Days On Market increased by 10-days to 45-days over the course of the year.

Months of Inventory

Inventory hovered just under 3 months. That’s a pretty balanced market between buyers and sellers.

Mortgage Rate Stats

Rates fluctuated throughout the year sometimes not in line with expectations. The great news is by the end of the year, they reached their lowest point in years into the low 6% range with FHA hovering in the high 5% range. This is why we’re starting to see more people come back into the market in December and January.

Opinion

If you talked to anyone in the business last year they all felt the same way. The market is ok, but there’s some rough going. We finished the year relatively flat, with a large volume of the population who needed to buy a home in ’25 or ’24 but didn’t. Is this the year they finally make the decision. Time will tell.

This group missed out on a lot of equity over the past few years waiting for the market to drop. The fundamentals for Sacramento only get better from here, so we’ll see the smart one’s get out of their own way and make the decision.

Buying a home is not about timing the market.

In 20 years from now we’re all going to wish we bought more real estate in California.

Closing

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