Housing Market Trends and Predictions in Sacramento for the Years 2025-2026
The Sacramento housing market is expected to undergo a period of stabilization and potential rebound in 2026, according to the latest forecasts. Here's what you need to know about the current market trends and the outlook for the coming year.
Current Market Trends
The housing market in Sacramento has seen a cooling trend in recent months. As of 2025, the year-over-year home value growth stands at -1.1%, following a surge during the pandemic[1][2]. The inventory of homes for sale has increased, offering more options for buyers, while sales have decreased over the past year[3]. High mortgage rates, currently averaging around 6.72% for a 30-year fixed rate, have been a significant factor in reduced buyer demand[3].
Forecast for 2026
If mortgage rates drop as predicted by some analysts, the market could stabilize and potentially see a slight rebound in 2026. This would depend on improvements in buyer demand and economic conditions[3]. However, the market faces challenges such as rising inventory and decreased sales, which could impact the pace of recovery[3].
General Outlook
The forecast for 2026 is cautiously optimistic but heavily dependent on external factors like interest rates and broader economic trends. As such, both buyers and sellers should closely monitor these developments to make informed decisions.
For Buyers
If you're a buyer in the Sacramento housing market, you might find better deals in the coming months. With the potential for lower mortgage rates, it could be an opportune time to enter the market.
For Sellers
If you're a seller in the Sacramento housing market, it's important to be realistic about pricing your home competitively. With increased inventory and decreased sales, it's crucial to find the right balance between a competitive price and a fair return on investment.
The Long-Term Picture
Over the past decade, Sacramento has experienced consistent and significant property value appreciation[4]. This, coupled with its relatively lower cost of living compared to many other major California cities, makes it an attractive destination for individuals and families looking for affordable housing options.
Investing in real estate in Sacramento can offer tax benefits that make it an even more attractive investment. Additionally, investing in a rental property in Sacramento can provide a steady income stream.
Lawrence Yun, the Chief Economist for the National Association of Realtors (NAR), forecasts median home prices to increase by 3% in 2025, and new home sales to climb by 10% in the same year[5]. However, the Sacramento housing market is also expected to experience a period of continued price correction in 2026[6].
In conclusion, while the Sacramento housing market is expected to undergo a period of stabilization and potential rebound in 2026, it's important for both buyers and sellers to stay informed about the latest developments to make well-informed decisions. Consulting with real estate professionals who are knowledgeable about the Sacramento market can help in navigating this dynamic market.
[1] https://www.zillow.com/sacramento-ca/home-values/ [2] https://www.redfin.com/city/33708/CA/Sacramento/housing-market [3] https://www.realtor.com/news/housing-trends/sacramento-housing-market-forecast-2026/ [4] https://www.sacbee.com/business/real-estate/article248153353.html [5] https://www.realtor.com/news/economic-research/nar-forecasts-existing-home-sales-to-rise-by-6-in-2025/ [6] https://www.realtor.com/news/housing-trends/sacramento-housing-market-forecast-2026/
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