Report signals end of pandemic-era housing boom as buyers wait on lower interest rates
New home sales across the greater Sacramento region returned to pre-pandemic levels in 2025, signaling the end of the surge fueled by historically low interest rates and pandemic-driven migration, according to a new report released by the North State Building Industry Association.
Builders reported selling 5,747 new homes across the eight-county region in 2025, an 18 percent decline from 2024 but still 8 percent higher than 2019 totals. The association noted that sales had accelerated sharply during the pandemic years as remote work expanded, migration into the region increased and mortgage rates dropped to historic lows, at times falling below 3 percent.
Despite aggressive builder incentives, BIA President and CEO Tim Murphy said many prospective buyers remained on the sidelines as they wait for mortgage rates to fall further.
“Interest rates have been trending downward and fell to an average of 6.19 percent in early January,” Murphy said. “As financing costs continue to decline, we expect more households to reenter the housing market in 2026.”
Murphy also pointed to recent national research indicating that even modest rate improvements could significantly affect buyer activity. A study by the National Association of Home Builders found that a 25-basis-point drop from 6.25 percent to 6 percent could bring approximately 1.1 million additional households back into the homebuying market nationwide.
Regionally, Roseville led all cities in new home sales in 2025 with 447 units sold, followed by Rancho Cordova with 386. Elk Grove recorded 280 sales, Sacramento reported 262, Plumas Lake saw 159 and Lincoln finished the year with 150 new home sales.
As is typical for the region, sales slowed considerably at the end of the year. BIA members reported 338 new home sales in December, down 17 percent from November and 15 percent lower than December 2024. Rancho Cordova led December sales with 74 homes sold, followed by Roseville with 59, Sacramento with 41, Elk Grove with 34 and Plumas Lake with 28.
Murphy said housing analysts speaking at the BIA’s recent housing forecast event expressed optimism that the market’s worst period has passed and projected gradual improvement over the next three years.
He added that new homes continue to offer advantages over existing properties, particularly as many homeowners with low mortgage rates remain reluctant to sell, keeping resale inventory well below normal levels. Builders are also able to offer incentives that existing homeowners typically cannot match.
“In addition, buying a new home gives buyers the opportunity to customize many features to meet their family’s needs and provides peace of mind since problems are much less likely and any that occur are covered by warranties,” Murphy said.
Murphy also highlighted ongoing efforts to improve affordability by working with local governments to streamline development processes and reduce fees, which currently average $109,000 per new home in the region.
The BIA data includes sales from 191 new home communities located throughout Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. The association noted that annual totals were adjusted to include figures from members who do not report sales on a monthly basis, resulting in a total that exceeds the combined county and submarket figures.
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