SACRAMENTO >> When the Curry family bought their first home in 2019, it was big enough for their small family.

The 1,067-square-foot Rancho Cordova, California, home provided enough space for Anna and Isaak Curry, their infant son Kylan and their dog Echo.

In 2020, the couple took advantage of ultra low mortgage rates and refinanced, scoring a 2.25% rate. Now, the couple has a second child, a second dog, and want the option to have another child. They’re ready to move to a bigger home, closer to their children’s’ school in El Dorado County, but don’t want to lose their low rate. So they stay put.

“How can you let go of 2.25%?” said Anna Curry, who is also a Sacramento realtor and broker. “It’s like a treasure. You don’t get that ever again in your lifetime.”

The Currys both work from home, using their 1-year-old daughter Lotus’ bedroom as a shared office with two desks, Anna said. Sometimes Isaak has to keep working after Lotus’ bedtime, so Anna has to put her to sleep in the couples’ bed, then wake her up to move her later.

The space got even smaller in 2023, when Anna Curry’s parents, grandparents and brother all fled Ukraine and moved in with the family temporarily. They have since moved out, but the grandparents will likely move back in at some point, Anna Curry said.

While they wait for rates to decrease, the couple plans to rent a house in El Dorado County and rent out their Rancho Cordova home — keeping their three-bedroom two-bathroom starter home off the market for the foreseeable future.

Many more homes sold in Sacramento in 2021

Thousands of Sacramento homeowners are staying put instead of selling their homes because they don’t want to give up their great mortgage rates, a Sacramento Bee analysis found.

The average mortgage interest rate was about 7% in January. It was about 3% at this point in 2021. The difference is tangible. A 30-year $400,000 loan at 3% interest will cost about $1,700 a month in principal and interest payments. At 7% interest, that same loan will cost about $2,700 a month.

The rates are impacting the local market. There were about 22,500 homes sold in the Sacramento region last year, down from about 40,000 sales in 2021, according to Zillow.

Sacramento’s 43% drop in sales from 2021 to 2024 was slightly less severe than some other parts of California, such as Riverside County, but higher than the 38% national average for the time frame.

Many buyers are waiting for rates to drop as low as they did during the early years of the COVID-19 pandemic, but that’s not likely to happen, said Mike Frank, a Sacramento mortgage lender.

“That’s kind of a once in a generation kind of thing,” Frank said. “Now with everyone tightening their belts, eggs cost too much, you don’t even want to put gas in your car, do you really want to go shopping for a house?”

As a result, many people who bought or refinanced during 2021 are now just redoing a bathroom or kitchen to make their current space more comfortable, Frank said.

The situation is often causing Sacramentans to rent for much longer than they wanted to, said Anna Curry.

“They’re giving up on even the idea of buying a house one day,” Anna Curry said.

But renting is expensive too. Sacramento was the 20th most expensive rental market in the United States in December, according to Apartment List data published recently. The typical apartment in the four-county Sacramento region rented for $1,748. That’s higher than Chicago and Portland, Oregon. Sacramento renters are increasingly squeezing into studio apartments.

What should homebuyers do?

The situation has had a somewhat unexpected result — newly constructed homes are sometimes more affordable in Sacramento now than older homes.

Some Sacramento buyers have been scoring lower mortgage rates, as low as 4%, on new construction, Frank said

Unlike families selling their older homes, builders of new construction, often in complexes, are able to take advantage of government subsidies and other tools to lower costs.

“I’ve never seen builders able to negotiate pricing so much,” Anna Curry said. “They’re trying to get rid of their inventory. I see great opportunities for buyers”

Anna Curry in December sold a new North Natomas condo to a buyer for about $10,000 off the listing price, she said.

New construction is harder to find in the urban core of midtown and downtown however. Buyers often have to go to North Natomas, or suburbs such as Folsom and Rancho Cordova.

Frank expects the holding pattern to break, though he’s not sure when. He thinks the rates will come down slightly in 2025, but not enough to drastically change the situation.

“The reasons people move are never going to change,” Frank said. “I think we are slowly on the path back to normal but we aren’t there yet.”

Distributed by Tribune News Service.