Hunting for a Sacramento-area home? The option providing ‘a lot of choices for consumers’

With their options elsewhere dwindling, homebuyers in the Sacramento region are once again flocking to the new home market in big numbers.

The number of new homes sold in the six-county region in February was the third-highest for that month going back to 2007, according to new data from the North State Building Industry Association. A total of 618 new homes were sold last month.

Placer County, where hundreds of new homes are being built in and around Roseville, led the region with 286 new home sales. Sacramento County was second, while Yuba County — an increasingly popular destination for families priced out of the south Placer suburbs — was third.

The number of overall home sales in the region has dropped significantly in recent months as many potential sellers are opting to hold onto homes they purchased when mortgage rates were far lower. Those homeowners are hesitant to sell their homes now and purchase another house with rates hovering around 7%, experts say.

That’s left house hunters with fewer options — and the new home market is helping to fill the void.

“With (traditional) resale, there are a lot of people locked in with lower rates,” said Michael Strech, the Building Industry Association’s president and CEO. “On the new home side, that’s not something we have to worry about.”

Home hunters are finding many advantages to buying newly-constructed homes. Those houses typically come with features coveted by homeowners, including energy-efficient power systems, spacious layouts and accessory dwelling units.

What’s more, home builders can offer financial incentives, including credits that help buyers lower their mortgage rates.

“That makes a big difference in the payment,” said Sacramento real estate market analyst and appraiser Ryan Lundquist. “We have to recognize that new home builders are able to offer something sellers can’t.”

Strech said he expects interest in new homes to continue through 2023, although spiking mortgage rates might lead to sales edging “slightly downward.”