Here’s a quick update on the Sunnyvale housing market. Homes are selling at a steady pace, with more properties changing hands. The number of homes for sale remains consistent, and prices are holding firm.
Home price growth needs to stabilize while mortgage rates drop below six percent.
If incomes grow 3.9% annually and rates fall to 5.5%, normalization depends on price trends.
Market could normalize by November 2027 if home prices decline 2% yearly.
If home prices stay flat, the market may normalize by January 2029.
Rising home prices and high rates could delay housing normalization until 2032–2034.
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Experts predict mortgage rates will hover around mid-6% through most of 2026.
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Fannie Mae forecasts 6.5% by end-2025, easing to 6.1% by end-2026.
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MBA and NAR project 6.7% by late 2025, gradually dipping to 6.0–6.5% in 2026.
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NAHB sees 6.6% now, moving slowly down to 6.32% next year.
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Deloitte and Goldman Sachs tie rates to Treasury yields, expecting 6.0–6.2% for 2026.
Home prices expected to grow modestly in 2026 after slower activity in 2025.
Tech employment trends continue influencing demand in Bay Area and Silicon Valley.
Inventory remains tight in Los Angeles and coastal metros, limiting sales volume.
Inland markets like Sacramento show more affordability-driven migration.
The Fed’s first 2025 rate cut pushed HELOCs to 7.88% and home equity loans to 8.19%.
By year’s end, HELOCs may hit 7.3%, loans near 7.9%.
Total Fed cuts from Sep 2024–Dec 2025 could reach 175 basis points, further lowering rates.
Homeowner equity totals $17.5 trillion, about $307,000 per household.
Home equity lending surged 16% last quarter, $52 billion pulled out.
Homebuyers in Santa Clara County face challenges due to rising mortgage rates and home prices, with the median single-family home price at $1.88 million and condos at $1.01 million. Affordability is now the top barrier, followed by expectations of mortgage rate drops and low inventory. Consulting a skilled realtor is crucial for navigating these market complexities and securing a home.
San Francisco has permitted only 5% of its state-mandated housing units, falling short of its 82,000-unit goal by 2031. Many Bay Area cities are doing worse, with some below 1% of their targets. Despite state laws to streamline approvals, high construction costs, interest rates, and tariffs deter developers. A 2024 law to fast-track SF projects has had minimal impact, showing that cutting red tape alone isn't boosting housing development.