Despite generous builder incentives, many prospective buyers have been holding off until mortgage rates dip below 6 percent. Photo courtesy of Freepik

Note: The Sales Report distributed on January 13 contained incorrect statistics for the 2025 sales by submarket. The information has been corrected below. We regret the error.

SACRAMENTO REGION, CA (MPG) - New home sales in the greater Sacramento region returned to pre-pandemic levels in 2025, signaling that the pandemic-era housing boom has ended, the North State Building Industry Association reported recently.

Building Industry Association members reported selling 5,747 homes in the eight-county region during the year, down 18 percent from 2024 but still 8 percent 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 percent.

Building Industry Association President and CEO Tim Murphy said despite generous builder incentives, many prospective buyers have been holding off until mortgage rates dip below 6 percent.

“Interest rates have been trending downward and fell to an average of 6.19 percent in early January. As financing costs continue to decline, we expect more households to reenter the housing market in 2026,” Murphy said.

“A recent analysis by the National Association of Home Builders shows that a 25-basis-point reduction from 6.25 percent to 6 percent could bring approximately 1.1 million additional households back into the buyer pool nationwide, so downward-trending rates are encouraging."

In 2025, Roseville saw the most new home sales with 1,094, followed by Rancho Cordova (946), Elk Grove (649), Sacramento (631), and Plumas Lake (28).

As typical in the region, December sales dropped to a low point, with 338 sales reported by members. That’s down 17 percent from November and 15 percent lower than December 2024. For the month, Rancho Cordova was the sales leader with 74, followed by Roseville (59), Sacramento (41), Elk Grove (34) and Plumas Lake (28).

Murphy noted that housing experts at the Building Industry Association’s 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. 

He added that new homes remain a great option for buyers because of incentives existing homeowners can’t offer, and because the supply of existing homes is still well below normal as homeowners with low mortgage rates remain reluctant to sell. 

“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.

“We are also continuing to improve affordability by working with local governments to streamline procedures and reduce fees that currently average $109,000 per new home.”

Building Industry Association statistics covered 191 new home communities in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.

(Note: The annual sales total has been trued up by including figures from Building Industry Association members who do not report on a monthly basis. Thus, the annual figure is larger than the sum of annual sales by county and by submarket.)

For more information, visit www.northstatebia.org