Mortgage rates have jumped again.
About three weeks ago, the average 30-year mortgage rate was around 6.75%. This week, it is around 7.25%.
That's a pretty significant move in a very short period of time.
But instead of focusing only on what happened over the last three weeks, I thought it would be more interesting to zoom out and look at what has happened over the last four years.
We've Been Here Before
It might feel like 7% mortgage rates are unusually high, but we've actually spent much of the past four years bouncing between roughly 6% and 8%.
Rates approached 6% in early 2023, again in September 2024, and briefly fell below 6% in February 2026.
Each time, the lower rates didn't last very long.
We've also seen rates above 7% several times, including the fall of 2022 and spring of 2023, when they eventually approached 8% later that year, and again for extended periods from late 2024 into 2025.
So while this latest jump has certainly been painful for buyers, it isn't outside the range we've been living with for the past four years.
Here's What I Find More Interesting
Now look at what happened to Placer County home prices during those same four years.
Not much.
Since September 2022, mortgage rates have moved from the low 6% range to nearly 8%, back toward 6%, above 7%, down again, and now back above 7%.
Meanwhile, Placer County home prices have stayed within a remarkably narrow range.
As the chart shows, the median sale price has generally remained between roughly $620,000 and $680,000 over the past four years. Today, it is near the upper end of that range.
There have certainly been seasonal ups and downs, but we haven't seen anything close to the dramatic movement we've seen in mortgage rates.
That's what I find so interesting.
Mortgage rates have changed dramatically. Nominal home prices really haven't.
But Inflation Changes the Picture
There is another part of this story that doesn't show up on the home-price chart.
Since September 2022, the Consumer Price Index has increased approximately 12.9%.
In other words, the dollar itself buys considerably less today than it did four years ago.
Here's a simple way to think about it.
If a $680,000 home price in September 2022 had simply kept pace with inflation, that same price would need to be approximately $767,000 today.
Instead, the median sale price in Placer County is still around $680,000.
A price that remained completely unchanged during this period has lost approximately 11.4% of its purchasing power after adjusting for inflation.
So there are really two ways to describe what has happened over the past four years.
In nominal dollars, Placer County home prices have essentially moved sideways.
After adjusting for inflation, those same dollars are worth considerably less.
Put another way, compared with the overall rising cost of goods and services measured by the CPI, Placer County homes have actually become less expensive over the past four years on an inflation-adjusted basis.
That's something you wouldn't necessarily realize just by looking at home prices.
Why Have Prices Stayed So Stubbornly Flat?
My opinion is that we've been caught in something of a stalemate.
Higher mortgage rates have dramatically reduced buyer purchasing power.
A buyer who could comfortably afford a certain payment at 3% or 4% simply can't borrow the same amount at 7%.
Normally, you might expect that to put significant downward pressure on home prices.
But there's another force working in the opposite direction.
A huge number of existing homeowners have mortgages with rates far below today's market. Understandably, many are reluctant to give up a 3% or 4% mortgage to sell their home and take on a new loan at 6%, 7% or more.
That has helped keep the number of homes coming onto the market relatively constrained.
So we have two opposing forces.
- Buyers have less purchasing power, which puts downward pressure on prices.
- Homeowners have less incentive to sell, which restricts supply and puts upward pressure on prices.
For the past four years, those two forces have largely fought each other to a draw.
And the result is right there in the charts: a lot of movement in mortgage rates, but surprisingly little movement in Placer County home prices.
That pattern has affected communities throughout the county, whether you're looking at homes for sale in Rocklin, Loomis real estate, homes in Auburn, Granite Bay real estate or homes for sale in Lincoln.
So What Are We Waiting For?
This is probably the biggest takeaway for me.
For several years now, I've talked with people who are waiting for one of two things:
"I'll buy when rates get back into the 5s."
Or:
"I'll wait until home prices come down."
Either could still happen. I certainly don't know where mortgage rates or home prices will be next year.
But the last four years are a good reminder that neither one has to happen anytime soon.
We've approached or briefly touched 6% several times, only to see rates move higher again.
We've also spent extended periods with rates above 7% without seeing a major decline in nominal Placer County home prices.
And while we've been waiting, four years have passed.
Time Matters Too
This is the part that I think can get lost when we spend too much time looking at charts, mortgage rates and home prices.
We don't have an infinite amount of time.
Kids get older. We get older.
Families grow. Kids leave home. Jobs change. Parents need help. Retirement arrives. Sometimes we simply decide that we want something different out of where we live.
If your current home works for you and you don't have a reason to move, there is absolutely nothing wrong with staying put.
But if you have a real reason or desire to move, waiting indefinitely for a particular mortgage rate or home price has a cost of its own.
Maybe rates eventually fall into the 5s and stay there.
Maybe home prices eventually decline significantly.
Both are possible.
But after watching the market spend the past four years moving within essentially the same range, I wouldn't plan my life around either one happening on a particular timeline.
If your kids are getting older and you want a larger home while they're still living with you, those years don't come back.
If you're an empty nester who has been talking about downsizing, four more years in a house you no longer want is still four years.
If you're approaching retirement and have always dreamed of living somewhere else, time matters there too.
And if there is simply something you want to change about where or how you live, that matters.
The question isn't always:
"Is this the perfect time to move?"
Sometimes a better question is:
"How long am I willing to put my plans on hold waiting for the market to give me exactly what I want?"
That's a question only you can answer.
But after four years of watching mortgage rates move dramatically while Placer County home prices barely moved at all, I think it's one worth asking.
Making the Decision That's Right for You
If you've been thinking about making a move but have been waiting for rates or home prices to reach a certain number, I'm always happy to talk through what the numbers actually look like for your situation.
Sometimes waiting makes sense. Sometimes moving forward makes sense. The important thing is understanding your options so you can make the decision that works best for you and your family.
If you have questions about the Placer County real estate market or are considering buying or selling a home, feel free to contact me and we can talk through your plans.
Patrick Hake
Broker Associate
eXp Realty of California
License #01349088
Call or text: (916) 316-5626
www.OwnPlacer.com/patrick-hake.php
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