The Sacramento market is buzzing again because of Fed rate chatter. This week’s update decodes the September 16, 2025 Fed cut, current mortgage rates, and how buyers and sellers should act based on price point, construction type, and lender incentives.
Fed Rate Cut: What actually happened
On September 16, 2025, the Federal Reserve trimmed the federal funds rate by 0.25%, bringing the target to 4.00%–4.25%. Mortgage rates did not drop afterward; they actually ticked up slightly because lenders had already priced in the cut.
This pattern has repeated—rates often fall before the announcement, so waiting until after the Fed decision usually doesn’t pay off. When mortgage rates drop in anticipation, that’s the moment to lock rather than hoping for further decreases post-cut.
Current mortgage rates
Those averages remain lower than the highs earlier in the year, which brings more buyers back but still keeps borrowing elevated compared to historical norms.
- 30-year fixed: roughly 6.25%–6.35%
- 15-year fixed: roughly 5.4%–5.5%
How the Sacramento market is reacting
Entry-level homes ($400K–$500K)
This segment is the most active. Multiple offers are returning, some buyers waive contingencies, and over-asking offers pop up when the home is priced right and in great condition. First-time buyers dominate this price range.
Mid-to-high price homes ($700K+)
Multiple offers are less frequent because fewer first-time buyers qualify at this range. Sellers need strong presentation and accurate pricing; even beautifully remodeled homes stall if they are overpriced.
New construction homes
Builders vary widely—some offer $50K–$80K price reductions, rate buydowns, or closing cost credits, while others hold firm with no incentives. Working with an agent who knows which communities actually deliver value can save you tens of thousands.
Expert advice for buyers and sellers
For buyers
- Lock a good mortgage rate now—don’t wait for the Fed meeting.
- Focus competition on well-priced, well-conditioned homes, since those deliver long-term value even if they attract the most bidders.
- Lean on your agent when evaluating new construction offers to separate genuine incentives from marketing.
For sellers
- Know where your home sits in the market and price it strategically to keep momentum.
- Plan concession, repair, and buydown tactics in advance so you can react without leaving money on the table.
- Presentation matters. Move-in-ready homes generate the cleanest offers.
Bottom line
The Fed cut reignited buyer interest, but the real action usually happens before the announcement. Mortgage rates remain historically high, yet small shifts are enough to drive demand in the entry-level market.
Sacramento clearly shows micro-market behavior: $400K–$500K homes are hot, $700K+ properties require more finesse, and new builds offer opportunities if you know where incentives are meaningful. Timing, strategy, and the right guidance make the difference.
FAQs
- Did the September Fed rate cut lower mortgage rates in Sacramento?
- Mortgages didn’t fall because lenders had already priced in the cut. Rates often drop before the announcement, so locking in early is usually the best play.
- Which price segment is most competitive right now?
- Entry-level homes in the $400K–$500K range are seeing multiple offers and some buyers waiving contingencies, while higher-priced homes move slower unless priced and presented perfectly.
- Should I rely on builder incentives when shopping new construction?
- An agent who tracks builder behavior can help you differentiate between genuine value (like real rate buydowns) and superficial credits that don’t move your total monthly cost much.
