Sacramento Real Estate

Navigating a Seller's Market Amidst Shifting Sands & Evolving Mortgage Rates

July 2025 Market Review

By Daniel Rivas, Sacramento Real Estate Expert

Hello, friends! As your local Sacramento real estate expert, I’m here not just to share numbers—but to give meaning to the market. Whether you’re buying your first home, downsizing, or investing in our vibrant region, understanding what’s happening on the ground is key to making confident, informed decisions.

This July 2025 review (based on June’s data) reveals a market in motion—still favoring sellers, yet undeniably influenced by a rising inventory, fluctuating interest rates, and subtle mindset shifts from both buyers and sellers. Let’s dive into what this all means for you.

The Seller’s Edge Is Softening

Let’s be clear: Sacramento remains a seller’s market. But it’s no longer the feeding frenzy of last year. Inventory rose a striking 46.7% year-over-year and 6.6% month-over-month, giving buyers more options than they’ve seen in recent memory.

Even with more homes on the market, prices are holding. The Average Sold Price per Square Foot rose to $349, a 1.5% annual gain. The Average Sold Price also climbed to $619,000, up 1.1% from May. Sacramento real estate continues to appreciate—albeit more gradually.

Sellers, take heart: you're still in a favorable position. We’re at 2.6 months of inventory based on closed sales (and 2.3 based on pending), which is well below the 3-month mark that defines a true seller’s market. But the days of twenty offers over asking? Those are slowly fading.

The Buyer Mindset is Changing

Although listings are up, sales were down—falling 3.5% year-over-year and 8.3% month-over-month, with 890 homes sold in June. Buyers are more discerning, taking time to evaluate their options. The Median Sold Pricedeclined slightly to $549,000, down 0.2% from May and 2% annually, signaling greater buyer resistance at higher price points.

We’re also seeing homes sit just a little longer. The Days on Market trend has leveled out, and while homes are still moving, that subtle shift indicates  buyers aren’t rushing as quickly to beat the competition.

One of the most telling stats? The Sold Price vs. Original List Price ratio dropped to 98%. While still strong, this suggests sellers are no longer commanding over-asking offers with waived contingencies. Buyers are negotiating again—and that’s a healthy sign of balance.

The Mortgage Rate Effect

Perhaps the biggest variable influencing today’s real estate decisions is interest rates. According to Freddie Mac’s Primary Mortgage Market Survey, 30-year fixed rates hovered around 6.75% in late June, then spiked to 7.25% by July 8th. For buyers, that jump can feel like a gut punch. A higher rate means a higher monthly payment—and that means either stretching your budget or rethinking your price point.

This rate movement isn’t isolated. Rising mortgage costs, combined with increased housing inventory, have even begun to impact construction spending, with homebuilders slowing projects in anticipation of softening demand.

That said, there’s a silver lining. Mortgage applications for purchases are up 16% compared to last year, proving that the desire to own a home is still alive and well. Buyers are active—they're just being more mindful about affordability.

Looking Ahead: What This Means for You

For Buyers:
This is your moment to breathe. With inventory up, you can afford to explore more homes and negotiate on terms that work for you. However, with appreciation still occurring, don’t wait too long. Partner with a trusted agent (like myself), get pre-approved, and be ready to act smartly when the right opportunity presents itself.

For Sellers:
Yes, it’s still your market—but strategy matters more than ever. Price competitively from day one. Expect some negotiation. Staging, presentation, and marketing are critical in attracting qualified, motivated buyers. I’m here to help you position your home for success, with a tailored plan based on real-time insights—not  outdated headlines.

The Bigger Picture

Behind the stats lies a community in transition. Sacramento is growing, evolving, and becoming more sophisticated. Homeownership remains one of the most powerful ways to build wealth, and understanding when and how to make your move is essential.

As we head into the latter half of the year, all eyes are on the Federal Reserve. Political pressure to lower rates is building, and while the Fed remains independent, their decisions will have major ripple effects across our local market. Volatility is likely—but so is opportunity.

Let’s Make It Happen—Together

Whether you're buying your dream home, preparing to sell, or simply staying informed, I’m here to help you navigate this market with confidence. My commitment is to you—to your goals, your timing, and your success.

Let’s make your next move the right one.