The market has changed and we are feeling those higher rates right now. Yet, the housing market isn’t completely dead either like some headlines might suggest. The truth is seven percent rates were no big deal for Chuck Norris, and he could eat them for breakfast. But we’re not Chuck. Today, let’s talk about what’s happening right now, what to expect, and I also have a huge market update for those interested.
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UPCOMING SPEAKING GIGS:
9/22/26 Downtown Regional MLS Meeting Q&A
9/24/26 Appraiser webinar TBA
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH
11/17/26 Orangevale MLS Meeting
11/19/26 Appraiser webinar TBA
1/15/27 PCAR
1/26/27 Residential Roundup

WE’VE SEEN 7% RATES IN RECENT YEARS
It’s shocking right now to see rates rising, but this isn’t the first time in recent years that rates have gone above 7%. Granted, it’s frustrating today since rates touched 6% in January, but here we are. The highest average rate yesterday was 7.22% per Mortgage News Daily.

THINGS TO WATCH IN TODAY’S MARKET
Not every market or listing is going to feel the same, but here are some things to watch in today’s market if rates continue to rise:
- Buyers backing off
- Sellers backing off
- Less traffic for listings
- Less pendings and closed sales
- People will still be buying and selling
- Some homes will still go very quickly with multiple offers
- Many sellers will need to reduce the price
- More credits from sellers
- More credits from builders
- The number of active listings can rise if buyers aren’t absorbing listings
- Buyers are poised to get even more picky about condition and location
- Prices could soften if rates rise sharply. This is to be determined, and some of it hinges on the balance between supply and demand. In recent years, sellers have stepped back from the market during uncertain times, and that keeps the market a little tighter.
Here’s a visual I made a few years ago, and these are things to consider:

DEER IN THE HEADLIGHTS VIBES FOR REAL ESTATE PROS
Objectivity is what helps during uncertain times, and staying connected to the stats becomes even more important. Do you know what doesn’t help? Sensationalism, worry, and doomerism. My advice? If you work in real estate, recognize when you have that deer in the headlights look. It’s okay to be frightened in the moment when the market changes, but staying stuck in that place does not help life or business. So, right now it’s time to lean more heavily into the numbers so you can understand what’s happening, explain the trends, and make plans for business.
BUYERS GETTING MORE FROM SELLERS
When a market softens, buyers gain more power to negotiate. Here’s a look at the average seller concession amount by county for August sales. These are things like credits for repairs or a rate buydown (not agent compensation). Keep in mind, not every transaction has concessions, but this is what it looks like when they do.

WHAT’S GOING ON WITH PENDINGS SINCE RATES INCREASED?
It’s only been a few days since rates went above 7%, so we really don’t have much data. It’s going to take time to see the trend. For now, here’s a look at about two hundred pendings in the Sacramento region since last Friday when rates were above 7%. Technically, rates hit 7% on Thursday, but I wanted to use Friday to be safe.

The thing that stands out to me below is 21% of pendings got into contract in one week or less, so it shows current buyers are still targeting new stuff that comes to the market. I like that 20% of pendings were on the market for over 90 days too as it shows there is hope for lingering listings (if the price is lowered). The spread here is actually pretty normal, but I think it’s a good reminder the market is still happening (expect a lower number of pendings though).

WE’RE POISED TO SEE A LOOSER FALL SEASON
Here’s an image from a presentation I gave yesterday. Haha. I asked people if they thought the market was going to loosen or tighten this fall, and I think most people went with the big jeans instead of skinny jeans. For now, nobody knows the future, but it’s reasonable to look at an environment with rising rates and plan for a softer fall. Here’s a good motto. The housing market will likely have a dull fall unless something interrupts the trend.

A REMINDER FOR REAL ESTATE PROFESSIONALS
Stop putting your hope in lower rates. Focus on the market that is here. And focus on what you can control, which is your mindset. Some real estate professionals obsess over mortgage rates and prices staying high, but nobody can control either of those. This is why it makes sense to focus on those who have incentive to buy and sell regardless of market conditions. I say this in every type of market. The focus is people. Always.

ADVICE FOR SELLERS IN TODAY’S MARKET
- Price reasonably
- Don’t push value
- Recognize buyers have lost purchasing power with rate increases, and this means they can’t afford as much home
- Don’t price to other overpriced listings. Give the most weight to other properties that are actually getting into contract. Remember, sales are like historic artifacts that tell us what the market used to be like.
- Recognize how sensitive buyers are about price, condition, and location
- Tidy up your home prior to listing if possible (fix what you can)
- Make the transaction good for the buyer also
- The market doesn’t care about your profit or how much you need to net
- Lower the price if needed. A price reduction helps you discover value. You’re not giving up value if value was never there.
- You might only get one offer. Don’t expect ten.
ADVICE FOR BUYERS IN TODAY’S MARKET
- Be patient for the right house
- Be ready to act quickly for the good stuff
- Don’t be afraid to offer on an overpriced home
- Buy what you can afford, not what you can refinance later
- Get concessions if the market will give them to you
- Pay attention to the local market (not just national trends)
- While some buyers shrink back as rates rise, watch for opportunities
—————- Local stats for those interested —————-
BIG MARKET UPDATE FOR 12 COUNTIES
For those interested, here are some stats and trend to watch in today’s market.
RECAPPING THE TREND
Most stats in August feel a little flat compared to one year ago. For months, we’ve been seeing price metrics either slightly higher or lower than last year. Yet, it’s also been an Uno Reverse Card trend since the market feels opposite this year with a softer fall instead of a tightening one. The good news for the housing market is we’ve had 5% growth in volume so far in 2026, but August was very flat, so this 5% growth really happened through July. In recent months, we’ve seen a hit to buyer demand with less pendings, and that looks to be showing up with a lower number of closed sales. Sellers have also backed off some in recent months, and that’s why the number of active listings is lower right now in eleven out of twelve counties I cover (only higher in Sutter). New construction has had a few months of very low volume, so I would expect to see builders offering even more concessions. Remember, any softness from 7% rates won’t really show up in the closed sales stats for a couple of months. My advice? Stay objective, let the numbers form your perspective, and be careful of hyperbole and sensationalism right now. Let the local stats keep you grounded in the actual market.

HERE’S WHAT GROWTH LOOKS LIKE (AND A WEAK AUGUST)
We’ve seen about 600 more sales so far this year, though the growth was from January to July since August was a weaker month.


SUBDUED SUPPLY, BUT ENOUGH GROWTH TO SOFTEN
We have slightly lower active supply compared to last year, but the gap between supply and demand has been wider overall, so we feel that in the market. Supply is only 2.4 months in Sacramento County, our largest county, but I find things start to feel frothy around this level. All I’m saying is we’re no longer at an incredibly low level where the market is really tight.

For those saying it’s 2008 again, just remember there were 8,900 more active listings in the region during August 2008.

There is a viral narrative saying it’s the widest gap ever between buyers and sellers, but that narrative is wildly disconnected from reality. And sorry for any confusion as active listings are black below and green above. I don’t typically make color mistakes like that, but I’ll have to correct that at some point before sharing next.

CHECK OUT PRICE CHANGE VISUALS
Some ways I’m looking at price change. Do you see how flat it’s been in recent years? And do you see the up and down seasonal rhythm?




THE REGIONAL MEDIAN IS OKAY (NOT OKAY IN SMALL AREAS)
The median sales price can be a hot mess if there isn’t enough data. I find the regional median is pretty solid, and it’s actually very consistent with the Freddie Mac Price Index for Sacramento (and Zillow’s Sacramento index). But the median is total garbage in smaller areas.
Do you see how the trend is more consistent with the region, but then all over the place in smaller areas?

Here’s another way to look at the trend. Price change has tightened this year. We were down about 4% last fall, but things have become quite flat lately as we make year-over-year comparisons.

But check out the smaller counties. These are messy from month to month. My advice? Don’t even share price metrics from month to month in smaller areas because you’re going to sound manic. Maybe focus on the regional trend instead.

EXPECT BUILDERS TO OFFER MORE CREDITS
August was pretty brutal for builders. It was basically the worst August since 2017, and this is why you can expect builders to offer more concessions. I think builders are going to have to lower prices also if this keeps up.

STATS FOR TWELVE COUNTIES
Here are the latest stats for twelve counties. Please don’t be rigid about smaller counties since the price stats especially bounce around all over the place. I was actually showing price stats in smaller areas in 90-day chunks, but even then, it was a hot mess, so this month I switched back to 30-day chunks. If you have any feedback, let me know. I just felt like it was garbage data even at 90 days…

Thanks for being here. I appreciate it.
Question: What are you seeing out there right now with 7% rates? What are you hearing from buyers and sellers?
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