September new home sales from 2017 to 2026 graph. Photo courtesy of North State Building Association

SACRAMENTO, CA (MPG) - Higher mortgage interest rates stemming from the increasing costs of energy as the war with Iran continues caused a drop in new home sales in September in the Sacramento region, the North State Building Industry Association reported today.

New home sales in the eight-county region totaled 286, which was down 14% from August, down 34% from September 2025 and down 30% from the historical average for the month dating back to 1997.

North State President & CEO Tim Murphy said interest rates rising to above 7% by the end of the month has caused many prospective buyers to hold off.

“Renewed tensions between the U.S. and Iran pushed oil and gasoline prices sharply higher, which lifted inflation expectations and put upward pressure on interest rates,” Murphy said.

He added that demand for housing remains strong, but higher mortgage rates, elevated construction costs and tighter real purchasing power are limiting both buyers and builders.

“Still, buyers should keep in mind that builders continue working hard to find ways to help them afford the new home of their dreams. I'd urge anyone thinking about buying a home to check with area builders to find out what incentives they are offering,” he said.

During September, Roseville saw the most new home sales with 61, followed by Rancho Cordova (52), Sacramento (47), Natomas (29) and Galt (24).

Sales were reported for 202 communities in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.