The Big Story

Quick Take:

The median home in the US is surprisingly appreciating at a slower rate than inflation.
Mortgage rates remain stagnant, in the high 6-percent range that we’ve seen for a couple of years at this point.
Inventory is continuing to build, as existing home sales remain stagnant on a year-over-year basis.
Another FOMC meeting has come and gone, and the federal funds rate remains unchanged.

Note: You can find the charts & graphs for the Big Story at the end of the following section.

*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.

Median home sales price grew by just 1.97%

In the not-so-distant past, housing price growth outstripped inflation growth by a wide margin. However, now that the housing market has normalized, we’re seeing more modest levels of appreciation, with the median home sale price increasing by just 1.97% on a year-over-year basis in June. This represents great news for home buyers, and the housing market as a whole, considering that the June CPI reading came in at 2.7%. It’ll be worth paying attention to this over the course of the next few months, especially considering that many analysts are expecting a rate cut from the Fed in the September FOMC meeting.

Inventory levels continue to build as more new homes hit the market

The trend of growing inventories has continued this month, with 15.91% more inventory on the market in June on a year-over-year basis. This growth in inventories can be attributed to the fact that the new homes are hitting the market at a much faster rate than new buyers are entering the market. In June, we saw a 0.77% increase in the number of existing homes sold on a year-over-year basis, while at the same time, we saw a 7.25% increase in the number of new listings hitting the market. Although there are still some buyers entering into the market every month, there is still a rather large contingent of people holding out until rates come back down.

The Fed is holding rates steady due to economic uncertainty

This past month, we saw the Fed hold rates steady once again, as they brace for the consequences of the newly minted tariff policies that went into effect in early August. Although inflation data has led many to believe that we need to see substantial rate cuts in the not-so-distant future, Fed officials are incredibly concerned about the potential impacts of the freshly enacted tariff policy. Additionally, the Fed has a dual mandate; it’s responsible for controlling inflation and promoting maximum employment. At this point in time, we’re seeing relatively low inflation, and a very low unemployment rate, so Fed officials seemingly aren’t in a hurry to cut the federal funds rate.

Mortgage rates remain stagnant, but comparatively high

It probably isn’t much of a surprise that inventories are building and median sale prices have remained relatively stagnant, given the lack of movement in rates. Many believe that there is a very large contingent of people who simply aren’t willing to pay a comparatively very high interest rate to purchase a home, especially given that many have locked into rates in the 2-4% range on existing homes. The consistently high mortgage rates that we’ve seen have led people to stay in their homes for longer, resulting in more sellers on the market than buyers. However, we might see some movement if we see some positive commentary from the Fed in the upcoming FOMC meeting.

However, it’s important to remember that this is what we’re seeing at a national level. Oftentimes, what we see in California can be quite a bit different than the nation as a whole. We’ve done a deep dive into California markets in the local lowdown section below.

Big Story Data

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The Local Lowdown

Quick Take:

Median sale prices show mixed performance across the Bay Area, with Silicon Valley maintaining strength while the East Bay experiences six consecutive months of declines.
Inventory dynamics vary dramatically by region - San Francisco faces severe shortages while most other areas see rising inventory levels.
Despite varying inventory conditions, listings are spending significantly more time on the market across nearly all Bay Area markets.
Market conditions range from highly competitive sellers' markets in core Silicon Valley to more balanced or buyer-friendly conditions in outlying areas.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Regional price performance reveals a tale of two markets

The Bay Area's real estate market is displaying stark regional differences in price performance. Silicon Valley continues to demonstrate remarkable resilience, with Santa Clara County single-family homes maintaining their impressive growth streak for over 12 months without a single year-over-year decline. In contrast, the East Bay has experienced six consecutive months of median sale price decreases, with single-family homes down 2.08% and 6.56% year-over-year in Alameda and Contra Costa Counties respectively. San Francisco and the North Bay fall somewhere in between, with San Francisco single-family homes up 2.34% year-over-year and relatively stable conditions across most North Bay counties, though Napa County stands out with a notable 14.94% decline in single-family home prices.

Inventory shortages persist in San Francisco while most regions see supply increases

San Francisco's inventory crisis continues to deepen, with 15.93% less single-family inventory and 19.91% fewer condos available compared to last year. This stands in sharp contrast to Silicon Valley, where inventories have grown 7.63% for single-family homes and 25.86% for condos year-over-year. The East Bay is experiencing similar inventory growth with a 15.68% increase in active single-family listings, while the North Bay has seen dramatic month-over-month inventory drops of 21.98% for single-family homes, largely attributed to record-low levels of new listings in July.

Extended time on market becomes the new normal across regions

Despite varying inventory conditions, one consistent trend emerges across the Bay Area: homes are taking longer to sell. The East Bay has seen particularly dramatic increases, with single-family homes now spending 16-18 days on market compared to 13 days last year, while condos are taking 31-35 days versus 19-24 days in 2024. Silicon Valley homes are still selling quickly at under 2.5 weeks, but even this represents an increase from last year. The North Bay is experiencing 20-30% longer listing periods in most markets, with some areas like Marin and Napa County condos seeing dramatic increases of 109.68% and 284.21% respectively.

Market dynamics shift toward more balanced conditions

The changing inventory and pricing dynamics are reshaping market competitiveness across the Bay Area. San Mateo and Santa Clara Counties remain fiercely competitive sellers' markets with just 1.7 and 1.5 months of supply respectively. However, other areas are trending toward more balanced conditions, with Marin County's single-family market flipping to a sellers' market at 2.3 months of supply, while San Francisco's condo market is approaching balance at 3.1 months. The East Bay maintains sellers' market conditions for single-family homes despite falling prices, while condo markets across most regions have shifted to buyer-friendly conditions with 3.4 to 5.7 months of supply available.