Modest Price Growth

Towards the end of the year, Sacramento’s housing market continued its steady growth, with median home prices increasing by 3% year-over-year, on average. This is a softer path than the frenetic pace of price increases during the pandemic boom. Mortgage rates, at about 7%, have cooled buyer demand, meaning fewer bidding wars and longer days on the market, though we saw some slight dips in the sixes during the summer of 2024.

Throughout the year demand consistently outpaced supply, making Sacramento a competitive market for buyers. Sellers, meanwhile, are adjusting expectations as price growth slows. Overall, the market is cooling but remains healthy, maintaining its reputation as one of California’s more balanced real estate landscapes.

More housing supply

In 2024, Sacramento's real estate inventory remained a hot topic, reflecting the region's balancing act between supply and demand. Limited new construction and hesitant sellers, many holding onto low-interest-rate mortgages, contributed to a tight housing supply.

This scarcity created an environment where competition stayed fierce, especially for well-priced homes in desirable neighborhoods. While the market saw an increase in listings, especially in the fall, it hasn't been enough to fully satisfy the growing pool of buyers attracted to Sacramento’s affordability and lifestyle perks.

Date the rate

With rates hovering at higher levels compared to the historic lows of previous years, many potential buyers found themselves reassessing their budgets or pausing their homeownership plans. For sellers, the "golden handcuffs" of low-rate mortgages made them reluctant to list. In response to these challenges, the phrase "date the rate, marry the house" became a popular phrase, encouraging buyers to focus on securing their dream home now and refinance later when rates eventually drop. Overall rates did not drop as low in 2024 as most experts predicted.

Sacramento’s Affordability Advantage

Although there has been an increase in pricing, Sacramento is one of the most affordable places to live in California. 

According to Houzeo, “Sacramento is one of the best places to live in California, with a monthly cost of food and utilities 7% lower than the state average. It is also a hub for technology businesses and economic growth. The city is home to major companies such as Amazon, Intel, and Aerojet.” 

The same gentling of the market could be seen across California. Places like the Bay Area and Southern California mostly saw flat or even falling prices in their areas, simply because the baseline costs were so high. Sacramento was notable for being one of the more balanced markets, in that buyers and sellers can both get a decent deal.

In comparison, Sacramento strikes a better balance between expense and quality of life. This affordability has fueled migration trends that benefit the region, with remote workers, retirees, and families moving from more expensive markets. The influx of new people not only reshapes local communities but also contributes to a consistent need for homes.

Meanwhile, migration patterns continued to favor Sacramento, as remote workers and retirees relocated from more expensive locales. As 2024 comes to a close, the Sacramento real estate market remains resilient and a potential growth sector as the economy evolves.

Sacramento’s Position in the Broader California Market

Sacramento's appeal isn’t just about affordability—it’s also about lifestyle. The city’s proximity to natural attractions such as Lake Tahoe, Napa Valley, and the Sierra Nevada Mountains makes it a prime location for those seeking a balance between urban convenience and outdoor recreation. Additionally, the city’s investments in infrastructure, such as the expansion of its light rail system and ongoing downtown revitalization projects, add to its livability. 

Thinking about relocating or purchasing an investment property in the Sacramento area? Connect with The Sherri Patterson Team for local resources, tours, and industry expertise.