Interest Rates, Housing Inventory & Jobs – Central Valley Real Estate Outlook 2025

Interest Rates, Housing Inventory & Jobs - Central Valley Real Estate Outlook 2025

How they affect our business and buyers. 

What to expect: lower rates for homes and a steady job market with increasing wages.

Don't believe everything the news is telling us.

First off, interest rates are lower and going down in the United States and around the world in all major economies except for Brazil.  The chart below shows the current rate for each country, the direction of rates up or down from the previous rate, and the date of the change. All changes took place this year in 2025.  This is a worldwide cycle as we go into the next central Economic stage.

Latest Interest Rates (as of 2025)

Central Bank	Country/Region	Current Rate	Direction	Previous Rate	Change Date
British Central Bank	United Kingdom	4.00%	🔽	4.25%	08-07-2025
Chilean Central Bank	Chile	4.75%	🔽	5.00%	07-29-2025
Russian Central Bank	Russia	18.00%	🔽	20.00%	07-25-2025
Turkish Central Bank	Türkiye	43.00%	🔽	46.00%	07-24-2025
Polish Central Bank	Poland	5.00%	🔽	5.25%	07-02-2025
Mexican Central Bank	Mexico	8.00%	🔽	8.50%	06-26-2025
Norwegian Central Bank	Norway	4.25%	🔽	4.50%	06-19-2025
Swiss Central Bank	Switzerland	0.00%	🔽	0.25%	06-19-2025
Brazilian Central Bank	Brazil	15.00%	🔼	14.75%	06-18-2025
Swedish Central Bank	Sweden	2.00%	🔽	2.25%	06-18-2025
Danish Central Bank	Denmark	1.75%	🔽	2.00%	06-05-2025
European Central Bank	Europe	2.15%	🔽	2.40%	06-05-2025
South African Central Bank	South Africa	7.25%	🔽	7.50%	05-29-2025
South Korean Central Bank	South Korea	2.50%	🔽	2.75%	05-29-2025
New Zealand Central Bank	New Zealand	3.25%	🔽	3.50%	05-28-2025
Australian Central Bank	Australia	3.85%	🔽	4.10%	05-21-2025

30-Year Fixed Rate Mortgage Average (U.S.)
As of August 15, 2024, the average 30-year fixed mortgage rate in the United States was 6.49%. Over the past year, rates have fluctuated between roughly 6.0% and just over 7.0%, with several peaks and declines.

The average 30-year fixed-rate mortgage in the United States, sourced from Freddie Mac via FRED, fluctuates from September 2024 to August 2025. It begins at around 6.2% in September 2024, dips slightly, then rises to a peak of about 6.9% in late 2024. It then trends downward with some volatility, reaching approximately 6.5% by mid-2025 and stabilizing around 6.3% by August 2025. A specific data point highlights Thursday, August 15, 2024, at 6.49%. Shaded areas indicate U.S. recessions.

Existing Home Sales: Months Supply (Federal Reserve Bank of ST Louis)

There is 0.7 months more supply than one year ago as of 6/1/2025.  Due to technical issues, the charts could not be displayed.

The months’ supply of existing home sales in the United States, sourced from the National Association of Realtors via FRED, shows a trend from July 2024 to June 2025. It starts at approximately 4.0 months in July 2024, remains stable through August 2024, then gradually declines to a low of about 3.2 months in December 2024. From January 2025 onward, it rises steadily, reaching around 4.6 months by June 2025. Shaded areas indicate U.S. recessions.

Existing Single-Family Home Sale - same period of time are actually up over last year.

What about Jobs, all the metro areas in our valley have job growth over the last year except for Stockton and Bakersfield.

California (Middle Third) - Metro Job Change, Q2 2025 (Mar - Jun)
In the middle third of California, Q2 2025 saw notable job gains in several metro areas:

• Sacramento - Roseville - Folsom: +2.6k jobs

• Fresno: +2.6k jobs

• Visalia - Porterville: +0.5k jobs

• Modesto: +0.4k jobs

• Merced: +0.4k jobs
  Job losses or flat changes occurred in:

• Stockton - Lodi: - 0.1k jobs

• Bakersfield: - 0.1k jobs

Existing Single-Family Home Sales Chart

July 2025 Housing Inventory vs. July 2019 (by State)
Inventory changes compared to July 2019:

• States like CA, NV, and MT: 0% to +10% inventory increase

• States like WA, OR, ID, UT, CO, AZ, NM, TX, FL, TN: >20% increase

• Many Midwest and Southeast states: - 20% to 0% change

• Several Northeast and Great Lakes states: > - 40% decline in inventory

U.S. State Housing Inventory Months Supply (U.S.)

From July 2024 to June 2025, months of supply in existing home sales rose from about 4.0 months in mid-2024 to nearly 4.8 months by June 2025, after dipping to 3.0 months in late 2024.

This compares housing inventory levels in U.S. states for July 2025 versus July 2019, categorized by percentage change: >20% increase (red, e.g., Texas, Florida, Arizona, Washington, Utah, Colorado, New Mexico, Tennessee); +10% to +20% increase ( none shown); 0% to +10% increase (Oregon, Oklahoma, Nebraska, Hawaii); -20% to 0% change ( California, Nevada, Arkansas, Louisiana, Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Rhode Island, Connecticut, Massachusetts); -40% to -20% decrease (Wyoming, Kansas, Minnesota, Ohio, Kentucky, Mississippi); <-40% decrease (Alaska, North Dakota, Wisconsin, Michigan, Illinois, Indiana, Pennsylvania, New York, New Jersey, Vermont, New Hampshire, Maine).

In summary:

The Central Valley real estate economy in mid-2025 shows steady underlying strength, driven by broad-based job growth in key metros from Fresno through Sacramento. In Q2 2025, Fresno and Sacramento each added 2.6k jobs, with additional gains in Visalia - Porterville (+0.5k), Modesto (+0.4k), and Merced (+0.4k). Housing inventory is only 0 - 10% above pre-pandemic levels (compared to 2019), avoiding the oversupply pressures seen in other states. This combination of strong employment growth, balanced inventory, and relative affordability positions the region for stable home values and sustained buyer demand going forward.

As of 09:06 AM PDT on Friday, August 15, 2025, the real estate economy in California’s Central Valley (excluding Bakersfield data and focusing on Fresno through Sacramento) shows a generally positive yet nuanced outlook. Housing demand remains robust, supported by population growth in counties like Fresno (0.9%) and a projected 10.5% increase in home sales to 304,400 units in 2025, according to the California Association of REALTORS®. The median home price is expected to rise 4.6% to $909,400, driven by a persistent housing shortage and declining interest rates from 6.6% in 2024 to 5.9% in 2025, which may help increase inventory slightly by easing the “lock-in” effect. Affordability remains a concern, with only 16% of households able to afford a median-priced home. Economic indicators include a projected 1.1% job growth rate and a 5.6% unemployment rate in 2025, though potential stagflation due to inflation and labor shortages poses risks. Additionally, land subsidence from groundwater pumping has led to a 2.4% to 5.8% drop in home values, costing $1.87 billion regionally, which could impact buyer confidence and long-term market stability. Overall, the market exhibits growth potential but faces notable challenges.