Silicon Valley Newsletter - August 2025

Real Estate

Silicon Valley Newsletter - August 2025

The Big Story

Quick Take:

  • The median home in the US is surprisingly appreciating at a slower rate than inflation.
  • Mortgage rates remain stagnant, in the high 6-percent range that we’ve seen for a couple of years at this point.
  • Inventory is continuing to build, as existing home sales remain stagnant on a year-over-year basis.
  • Another FOMC meeting has come and gone, and the federal funds rate remains unchanged.
Note: You can find the charts & graphs for the Big Story at the end of the following section.
*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.

Median home sales price grew by just 1.97%

In the not-so-distant past, housing price growth outstripped inflation growth by a wide margin. However, now that the housing market has normalized, we’re seeing more modest levels of appreciation, with the median home sale price increasing by just 1.97% on a year-over-year basis in June. This represents great news for home buyers, and the housing market as a whole, considering that the June CPI reading came in at 2.7%. It’ll be worth paying attention to this over the course of the next few months, especially considering that many analysts are expecting a rate cut from the Fed in the September FOMC meeting.

Inventory levels continue to build as more new homes hit the market

The trend of growing inventories has continued this month, with 15.91% more inventory on the market in June on a year-over-year basis. This growth in inventories can be attributed to the fact that the new homes are hitting the market at a much faster rate than new buyers are entering the market. In June, we saw a 0.77% increase in the number of existing homes sold on a year-over-year basis, while at the same time, we saw a 7.25% increase in the number of new listings hitting the market. Although there are still some buyers entering into the market every month, there is still a rather large contingent of people holding out until rates come back down.

The Fed is holding rates steady due to economic uncertainty

This past month, we saw the Fed hold rates steady once again, as they brace for the consequences of the newly minted tariff policies that went into effect in early August. Although inflation data has led many to believe that we need to see substantial rate cuts in the not-so-distant future, Fed officials are incredibly concerned about the potential impacts of the freshly enacted tariff policy. Additionally, the Fed has a dual mandate; it’s responsible for controlling inflation and promoting maximum employment. At this point in time, we’re seeing relatively low inflation, and a very low unemployment rate, so Fed officials seemingly aren’t in a hurry to cut the federal funds rate.

Mortgage rates remain stagnant, but comparatively high

It probably isn’t much of a surprise that inventories are building and median sale prices have remained relatively stagnant, given the lack of movement in rates. Many believe that there is a very large contingent of people who simply aren’t willing to pay a comparatively very high interest rate to purchase a home, especially given that many have locked into rates in the 2-4% range on existing homes. The consistently high mortgage rates that we’ve seen have led people to stay in their homes for longer, resulting in more sellers on the market than buyers. However, we might see some movement if we see some positive commentary from the Fed in the upcoming FOMC meeting.
 
However, it’s important to remember that this is what we’re seeing at a national level. Oftentimes, what we see in California can be quite a bit different than the nation as a whole. We’ve done a deep dive into California markets in the local lowdown section below.
 

Big Story Data

Line chart of existing home sales and inventory from June 2024 to June 2025; inventory rises as sales fluctuate.Chart of Federal Reserve mortgage-backed securities holdings, peaking in 2022 before declining through 2025.

Bar chart of monthly median principal and interest payments, rising to $2,254 in May 2025.Chart of monthly median home prices and mortgage rates, June 2024 to June 2025.

Chart of monthly U.S. new listings, July 2018–July 2025, with recurring seasonal peaks and dips.

The Local Lowdown

Quick Take:

  • Median sale prices in Santa Clara County continue their impressive growth streak
  • Inventories remain higher on a year-over-year basis
  • Listings are spending more time on the market across the board

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Santa Clara County median sale prices haven’t decreased in more than 12 months

While median sale prices have remained incredibly resilient throughout Silicon Valley, the single-family home market in Santa Clara County has remained incredibly strong. In fact, we haven’t seen median sale prices for single-family homes in Santa Clara County decrease on a year-over-year basis in more than a year. This steady up and to the right trajectory is astounding, given the inventory headwinds that the real estate market has experienced lately. However, it is worth noting that while Santa Clara County real estate has performed spectacularly, the entire Silicon Valley has more than retained its value throughout the same time period.

Inventories grow as fewer homes sell throughout Silicon Valley

Although median sale prices are holding strong in Silicon Valley, the area is experiencing the same phenomenon that much of the Bay Area is seeing. That phenomenon is the rise in inventories! The Silicon Valley single-family home market had 7.63% more inventory on the market in July on a year-over-year basis. The condo market saw an even steeper 25.86% increase. These increases can largely be attributed to the fact that homes aren’t selling as quickly as they were last year. In July, there were 2.64% fewer single-family homes sold and 21.76% fewer condos sold when compared to last year!

As inventories grow, listings continue to spend more time on the market

As you might already know, an increase in inventories often comes hand-in-hand with an increase in the amount of time it takes a listing to sell. The Silicon Valley market has largely not been an exception to this rule. Single-family homes in San Mateo and Santa Clara Counties are spending more time on the market than they were last year, while the amount of time homes in Santa Cruz County spend on the market has remained unchanged. With that being said, the single-family home market is still hot, with the average home being sold in less than 2.5 weeks throughout the entire Silicon Valley.

The single-family home market in San Mateo and Santa Clara Counties remains profoundly competitive

When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller’s market, whereas markets with more than three months of MSI are considered buyers’ markets.
 
San Mateo and Santa Clara County single-family home markets have been incredibly hot for quite some time, and that trend has continued. They remain fiercely competitive markets, with just 1.7 and 1.5 months' worth of supply listed on the market. The single-family home market in Santa Cruz County is more buyer-driven, with 4.3 months' worth of supply on the market. Lastly, the condo market is entirely buyer-driven, with 3.6 months of supply on the market in San Mateo County, 3.4 months of supply on the market in Santa Clara County, and 5.7 months of supply on the market in Santa Cruz County.
 

Local Lowdown Data

Line chart comparing monthly condo days on market in San Mateo, Santa Clara, and Santa Cruz from July 2023 to July 2025.Line chart comparing monthly days on market for single-family homes in San Mateo, Santa Clara, and Santa Cruz.

Chart of Silicon Valley condo inventory, comparing monthly new, sold, and for-sale listings from July 2023 to July 2025.Chart of Silicon Valley single-family home listings and sales, with for-sale inventory peaking in May 2025.

Bar chart comparing year-over-year condo median price changes in San Mateo, Santa Clara, and Santa Cruz counties.Line chart comparing monthly median condo prices in San Mateo, Santa Clara, and Santa Cruz from July 2022 to July 2025.

Bar chart of year-over-year single-family home price changes in three Silicon Valley counties, August 2024–July 2025.Line chart comparing monthly median single-family home prices in San Mateo, Santa Clara, and Santa Cruz, July 2022–July 2025.

Line chart of monthly Silicon Valley single-family home supply in San Mateo, Santa Clara, and Santa Cruz, July 2023–July 2025.

 

 

 

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