Here's a conversation we have almost every week. A buyer who has been ready for a year tells us they're going to wait for rates to come down before they start looking. The trouble is, they've been waiting since rates were supposed to drop in 2024. Then in 2025. They're still on the sidelines, and the homes they liked along the way have sold to someone else.

Ryan Lundquist, the appraiser behind the Sacramento Appraisal Blog, put the frustration plainly this month in a recent post with a blunt title: stop obsessing over rates. We read his analysis every month — he's about as close as this region has to a neutral referee on the numbers — and his June read matches what we're seeing from the agent's side of the table. The thing actually shaping the 2026 Sacramento market isn't the interest rate. It's the shortage of homes for sale.

What the Numbers Actually Show

Lundquist's latest supply analysis describes a market that is quietly tightening:

  • Active listings are down about 6% year over year. That's a genuine turn. Earlier this year inventory was running above 2024 levels — by May, new listings had slipped below 2024 after five straight months above it.
  • Closed sales are up roughly 2% year-to-date across the four-county region, with Sacramento County doing most of the lifting.
  • Mortgage rates rose from around 6% in January to north of 6.5% — and buyers kept buying anyway. (Rates move weekly; you can check the current number against Freddie Mac's weekly rate survey.)
  • The biggest growth in buyers showed up in the $400,000–$500,000 range.

Put those together and the headline writes itself: rates went up, demand held, and the supply of homes kept shrinking. Lundquist makes a sharp point about why agents don't feel that 2% bump in sales — a 2% change is almost imperceptible day to day, the way you wouldn't notice a friend losing 2% of their body weight. It's real; it's just quiet. The supply drop, on the other hand, is the part everyone feels.

The Rate Trap

Waiting for the perfect rate sounds prudent. In a market with fewer homes for sale, it's usually the most expensive thing a buyer can do.

Two things tend to happen. First, while you wait, you're passing on houses that won't come back — inventory is tight, and the good ones move. Second, on the day rates finally dip, every other buyer who was also waiting comes off the sidelines at once. That surge of competition bids prices up and erases the payment savings the lower rate was supposed to deliver. You can refinance a rate later. You can't go back and buy the home that already sold.

Nobody can reliably call where rates head next — Lundquist has spent four years watching "rates will drop soon" predictions that didn't pan out. So we don't build a buyer's plan around a forecast. We build it around being ready: a full pre-approval, a clear monthly payment you're comfortable with, and a sharp sense of which homes are worth moving on.

Why Supply Is the Real Constraint

There's a structural reason inventory is thin, and it shows up in Lundquist's data: about 15% of the homes for sale right now previously sold on the MLS between 2020 and 2025. A lot of owners who might list bought or refinanced at rates near 3%, and they're not eager to trade that for a 6.5% loan on the next house. That "lock-in" keeps homes off the market. As Lundquist puts it, the longer those listing lines stay subdued, the longer the market feels stuck — and he points to broader unease, from inflation to geopolitical headlines, keeping cautious sellers cautious.

Here's where our job and his diverge in a useful way. Lundquist's data is regional, and it's excellent at that scale. But "the region is down 6%" hides enormous block-by-block variation, and that's where buyers and sellers actually live. Some pockets are genuinely buyer-leaning right now — we've written about softening, more negotiable conditions in places like Elk Grove and West Sacramento. Meanwhile, a well-priced home in a supply-starved, school-driven area like Folsom or Fair Oaks can still draw multiple offers in a weekend. And that $400,000–$500,000 band where buyers are growing fastest? That's exactly where competition is stiffest — value areas like Citrus Heights are doing real work in this market. The regional median can't tell you any of that. A local agent can.

If You're Buying

  • Don't anchor to a rate forecast no one can make. Plan around your payment and your timeline instead.
  • Get fully pre-approved, not just pre-qualified. In a low-supply market, the ready buyer wins the house.
  • Hunt where the leverage is. Buyer-leaning pockets and listings that have sat a few weeks (price reductions cluster on overpriced and higher-end homes) are where you negotiate.
  • If the payment is the obstacle, ask us about programs like CalHFA down payment assistance — and remember you can refinance the rate down the road. You can't re-buy the house.
  • Work with someone tracking supply street by street, not just quoting the regional median.

If You're Selling

  • The supply shortage is your tailwind. You're facing less competition than a typical spring, and serious buyers are still out there.
  • But price to today, not to last year's peak. Buyers are payment-sensitive, and overpriced homes are the ones sitting — stale active listings have been averaging well over a month on market.
  • If you've been holding because of your low rate, that's fair — but if life calls for a move, thin inventory is genuinely working in your favor right now.
  • Start with a real number. Get a real home valuation based on your block and your home's actual condition, not a Zillow estimate.

An Honest Word on Distress

Lundquist also flags a slight uptick in short sales, and his read is the right one: notice it, keep it in context, don't sensationalize it. The buyers most exposed are the folks who purchased in the last few years with low down payments — FHA and VA loans — because prices have been roughly flat, leaving little equity cushion. This is not a 2008 repeat.

That said, if you bought recently with little down and now need to sell, talk to us early. Peter has guided clients through short sales and other distressed transactions before, and there are almost always more options on the table when you start the conversation early rather than late.

The Bottom Line

Lundquist's advice to his fellow professionals was to stop obsessing over rates and focus on people. The buyer-and-seller version is the same: stop timing the rate, and start reading the actual market in front of you — which, in Sacramento right now, is defined by how few homes are for sale. If you want a clear-eyed read on what that means for your specific price range and neighborhood, that's exactly the conversation we like to have.

We'd also just point you to Lundquist's work directly — it's some of the most honest local market analysis out there, and we're glad to build on it.

Ready to make a move, or just want a straight answer about your options? Search Sacramento homes for sale, get a real home valuation, or contact us.

Or call us directly: (916) 739-2424

The Peter Parker Team | DRE# 01257844 | eXp Realty DRE# 01878277
Market data referenced from the Sacramento Appraisal Blog (June 3, 2026) and is approximate as of early-to-mid 2026. Market conditions and mortgage rates change frequently; verify current figures before making a decision. This is general information, not financial or legal advice.