Have interest rate cuts impacted the Citrus Heights real estate market?

By Sara Beth Williams–
Persistently high mortgage rates have dampened housing affordability and contributed to a “lackluster” sales environment in Citrus Heights and elsewhere.

While many were hopeful that the recent Federal Reserve interest rate cut would help, there hasn’t been any “big change yet,” according to regional housing analyst Ryan Lundquist.

In an email to The Sentinel, Lundquist said the Federal Reserve interest rate impacts credit card and auto loan payments and doesn’t automatically mean a reduction in mortgage interest rates. However, Lundquist added that mortgage rates have already dropped over one percentage point from roughly seven and a half percent one year ago to the mid to lower six percent range in 2024 due to the hype.

Even with lowering mortgage interest rates, which are dependent on the buyers’ credit, Lundquist said it’s been a season where many buyers and sellers have been “waiting on the sidelines.”

The volume of houses sold between January and September in 2024 in the 95610 area code was down 43 percent, compared to pre-pandemic numbers, and sales volume was down 40 percent in the 95621 area code.

“Overall, the number of sales has been lackluster in Citrus Heights, but that’s pretty much been the vibe in most portions of the county, so what we’re seeing in Citrus Heights isn’t anything out of the ordinary,” Lundquist said, adding that the volume of sales has dropped 39 percent across the country.

In a recent post on his Sacramento Appraisal Blog, Lundquist said that lower-priced neighborhoods across the region “have been hit really hard.” Lundquist wrote that, generally, neighborhoods with higher price points fare better because potential buyers are “less sensitive to interest rates and affordability.”

In September, Lundquist said housing prices around Citrus Heights “bounce around” from month to month because of a lack of sales. June and July showed lower prices compared to May; however, August sales were higher than any other month in 2024.

The median sales price in Citrus Heights was $510,000 in August, according to Lundquist, which is five percent higher than one year ago.

In a series of marketing updates on his blog, Lundquist said the fall season has been “pretty normal” in terms of real estate sales, but that the market still has a “weird lackluster vibe.” Lundquist said the Sacramento region has had an estimated ten thousand fewer listings in 2024 so far compared to the number of listings from before 2020.

“All things said, the market hasn’t become this dynamic hot zone like some maybe expected would happen when the Fed cut rate,” Lundquist said.