Monthly report · No.18
FRIDAY, SEPTEMBER 26, 2025
the state of the market
The Housing Factor
By Ehsan Habib
*Data is sourced from the MLS and considers detached Single-Family Homes
August is typically the weakest month of the summer. August of 2025 continued the trend we saw in July; fewer new listings, a dip in sales, lower median sale prices, and increased Days on Market (DOM) than the year before.
We had 70 fewer new listings in Aug 2025 vs Aug 2024 - a 13.3% Year-over-Year (YoY) decrease. There were 41 fewer closed sales, a 10.5% YoY decrease. While the median sale price fell by 2.6%, the average sale price fell by only half a percent YoY. This pattern is consistent with July. This, coupled with the fact that different cities are moving in different directions, does add credence to a trend we have commented on before - more expensive markets are attracting ever greater competition, while neighborhoods with more affordable properties, especially below $900,000 are softening. If the median price is trending downward while the average price is staying relatively flat, then there are a greater quantity of homes selling for less, while the upper tiers of the market are absorbing an even greater share of the money spent on housing.
In this way, our local housing market is simply mirroring the ever-growing inequality in our society at large. High earners and wealthy households are earning and spending more, while much of the population is struggling to get by.
El Cerrito and Hercules had the largest drop in the number of listings sold YoY (89% and 120% respectively). For El Cerrito, this decrease in velocity comes after months of fierce activity and rising prices. For Hercules, this decrease in sales volume is coupled with a consistent growth in inventory over 2025; Hercules has the highest months’ supply of inventory of any city that we’re tracking.
Although the median price is down, El Sobrante has seen a significant surge in the number of sales in August. It ranked just under Berkeley in terms of absorption rate in August (Albany Berkeley, and El Sobrante being the top 3). A quick word about Albany’s absurd median price YoY change - in 2024 there were 3 sales of 4 bedroom homes, the smallest of which was 1,883 sq ft., and the median sale price was nearly $2.5 million. This August, 3 of the 6 homes sold were smaller 2 bedroom homes. As always, very small sample sizes can produce some odd-looking data points.
Whether buying or selling, how this data can inform your strategy for success will depend on what specific cities or neighborhoods you are operating in, as well as your personal circumstances. For a personalized consultation, reach out to us! We’re always happy to hear from you!
Mortgage news
MORTGAGE MUSINGS
By Evelyn Freitas | VP of Mortgage Lending at Guaranteed Rate NMLS 247578
Mortgage Musings: The Fed Cut Doesn’t Equal Lower Mortgage Rates — Yet
The Fed doesn’t set mortgage rates
The Fed cut its benchmark rate by a quarter point last week, and the headlines made it sound like mortgage rates would immediately go down. In reality, the Fed doesn’t control mortgage rates. The Fed sets short-term rates, while 15- and 30-year mortgages follow long-term bond yields and investor demand for mortgage-backed securities.
A shift in tone, not a freefall
The Fed pointed to a softer job market, higher unemployment risks, and stubborn inflation as reasons for the cut. Think of it as a balancing act: supporting the economy without fueling more inflation. Jerome Powell even described it as a hedge against risk — not a full policy pivot.
Mortgage rates move on bigger forces
Mortgage rates rise and fall based on inflation expectations, global money flows, and investor confidence. Markets already factor in what they believe the Fed will do next, so one rate cut doesn’t flip the switch.
What the dot plot tells us
The Fed’s “dot plot” — a chart of where policymakers expect rates to go — shows more cuts likely in 2025. If inflation keeps cooling and the job market eases, mortgage rates could gradually follow bond yields lower. Surprises in the economy, however, could send them back up.
Bottom line: The Fed’s tone is shifting in response to changing economic factors. Mortgage rates will continue to rise and fall in response to these factors in real time.
If you have questions or would like to discuss how this information applies to you specifically, please reach out at evelyn.freitas@rate.com.
Navigating the september 17 fed rate cut:
a mortgage expert explains
By Declan Spring
When the Federal Reserve cuts rates, many expect mortgage rates to fall too. But that’s not always what happens. In my recent conversation with mortgage expert Evelyn Freitas of Guaranteed Rate, she explains why the bond market—not the Fed—ultimately drives mortgage rates. As Evelyn puts it: “The bond market already did it.”
We also cover how Fed meetings really work, why Chairman Powell’s press conferences often move markets more than the vote itself, and what today’s rate environment means for buyers and refinancers. Evelyn shares practical strategies on rate buydowns, ARMs, and why locking early can bring peace of mind in a volatile market.
With conventional rates hovering in the low-6% range and some government-backed loans dipping below 6%, we discuss why crossing into the “5-handle” could spark new momentum in the housing market.
SUBSTACK: WHY our monthly newsletter isn’t enough
By Declan Spring
Think you’re “in the know” from our monthly recap? Think again. Real estate markets move fast, and a once-a-month snapshot can’t keep up.
That’s where our Weekly Substack comes in — it’s your early-warning system, unpacking fresh inventory data, interest-rate shifts, neighborhood trends, and hidden opportunities well before the headlines catch up.
Every issue delivers:
Local open-house & listing insights
Real-time rate analysis
Tactical tips for buyers, sellers, and refinancers
Market signals you won’t see anywhere else
Make your decisions with confidence — not hindsight.
Click here to subscribe to our weekly Substack now and stay one step ahead.
We are The Home Factor, REALTORS®, serving clients in the San Francisco Bay Area, and beyond.
Declan Spring · Declan@thehomefactor.com
(415) 446-8591 · DRE#01398898
Denitsa Shopova · Denitsa@thehomefactor.com
(510) 220-1634 · DRE#02137852
Ehsan Habib · Ehsan@thehomefactor.com
(510) 730-4516 · DRE#02166899
GUIDING AND INSPIRING PEOPLE TO INCREASE THEIR FINANCIAL STABILITY AND LOVE OF LIFE THROUGH WELL DESIGNED HOME OWNERSHIP
The Home Factor • DRE#01398898 • Powered by Keller Willams • 2089 Rose St, Berkeley, CA 94709 • Declan@TheHomeFactor.com · (415) 446-8591