Sacramento-Roseville-Folsom, CA
The California exit valve that quit working. For a decade Sacramento was where Bay Area households fled for cheaper housing. Now: HPI is up just +32.9% over 5 years (slower than the national average), the cap rate proxy is 3.15% (tight), and net IRS migration just flipped negative at −810. The metro is now losing residents on net while builders accelerate permits +14.9% YoY on a thesis the data no longer supports.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
expensive
Price to income
5.95×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs California
- 5.95×=
- vs U.S.
- 3.43×
Benchmark
ACS median home value ÷ median HHI
moderate
Rent to income
28.8%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs California
- 28.8%=
- vs U.S.
- 23.3%
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
tight
Cap rate proxy
3.1%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs California
- 3.1%+0.0
- vs U.S.
- 4.4%
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
shrinking
Net migration
-0.03%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs California
- -0.03%=
- vs U.S.
- 0.04%
Benchmark
IRS net migration ÷ population
pipeline accelerating
Permit pipeline
4.32
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs California
- 2.39+1.92
- vs U.S.
- 3.49+0.83
Benchmark
Census BPS permits TTM ÷ population × 1,000
softening
Unemployment
4.8%
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs California
- 4.8%=
- vs U.S.
- 4.0%
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about Sacramento
Sacramento is the California exit valve that quit working. Across 4 counties — Sacramento, Placer, Yolo, El Dorado — the metro packs 2.4 million residents with a household income of $93,986 (Census ACS) and a median home value of $559,000. The HUD Fair Market Rent for a 2-bedroom is $2,255. The House Price Index ran +32.9% over five years (FHFA HPI) — slightly UNDER the U.S. metros average of +34.3%. The early COVID Bay Area exodus drove the first half of the run; the rest faded.
The interesting fact is that Sacramento just flipped negative on net IRS migration. −810 returns (IRS SOI) — the metro is now losing residents on net. For most of the last decade, Sacramento was where Bay Area households fled when San Francisco priced them out. The data says the arbitrage has played out. Inside California, Sacramento ranks #17 of 26 for 5-year HPI — bottom half. The cap rate proxy sits at just 3.15%, well below the 4.4% national figure but slightly better than Portland's 2.85%.
The 4-county geometry concentrates the new supply in the affluent northern corridor:
- Sacramento County (1.58M pop, $498,900 MHV) leads with 6,294 permits TTM — Sacramento proper plus Elk Grove, Folsom, Citrus Heights. 61% of the metro pipeline.
- Placer County (407K pop, $658,800 MHV) is the high-velocity exurb at 3,200 permits = 7.87 per 1,000 — Roseville, Rocklin, Lincoln. The expensive northern growth corridor.
- Yolo County (217K pop, $593,800 MHV) adds 503 permits = 2.32 per 1,000 — Davis, Woodland. UC Davis ag-protection limits land.
- El Dorado County (192K pop, $640,500 MHV) adds 341 permits = 1.78 per 1,000 — Placerville, foothills, very slow.
Sacramento runs 4.32 permits per 1,000 residents — above the California state median (2.39) but well below the Sun Belt average. Permit YoY is +14.9% — actually accelerating. Builders are betting on continued Bay Area outflow that the migration data says has already slowed.
What's changing: net IRS migration is −810 returns — a marginal outflow but a directional flip. Unemployment is 4.8%, above the national 4.0%. Owner-occupancy 62.5%, bachelor's-or-higher 36.3% — educated, settled, expensive. R/I 28.8% moderate, just below the 30% burden line. The whole California cost stack is evident here without the California labor markets that justify it elsewhere.
What does an investor do?
- If you're hunting cash flow: Sacramento doesn't pencil. 3.15% cap proxy on a $559K median is tight, and falling rents won't help. If you need a California cash-flow play, look further north (Redding, Chico) or Central Valley (Fresno, Bakersfield).
- If you're playing appreciation: Sacramento is a wait-and-see. The migration flip is the leading indicator; the 2026-2027 HPI is going to struggle. Wait for clearer signal that the exit-valve story has actually rebuilt.
- If you already own here: Hold and watch the migration print. If 2027 IRS data shows another negative print, the trend is real and forward returns are limited. Sacramento is the late-cycle California metro — the appreciation has been booked, the new entrants aren't coming.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+32.9%
FHFA HPI · Q1 2020 → Q4 2025
+1.0% YoY
$559,000 median home value
Sacramento home prices climbed 32.9% over the last 5 years according to the FHFA repeat-sales index — a modest appreciation pace for a Midwest metro of this size. The 1-year change has cooled to 1.0%, signaling the post-2022 surge has unwound into steady-state appreciation.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01Sacramento ran **+32.9% over five years** — slightly UNDER the U.S. metros average of +34.3%. The Bay Area exodus story drove the early COVID years; the rest of the run faded.
- 02Inside California, Sacramento ranks **#17 of 26** for 5-year HPI — the bottom half. Smaller CA metros (Bakersfield, Fresno, Modesto) ran harder.
- 03**Recent YoY is +1.04%** — barely positive. Cooling fast. Three quarters from now this could be flat or negative.
- 04U.S. metros ran **+34.3%** over the same window. Sacramento underperformed the country by 1.4pp — a notable miss for a metro that was supposed to absorb Bay Area outflow.
- 05The takeaway: Sacramento was **the California exit valve**. The data says the valve has stopped working — the in-state arbitrage has played out, and the Bay Area outflow has slowed enough that Sacramento no longer wins by default.
Where the value tier sits — top 4 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Placer County | $658,800 | $114,678 | 5.74× | stretched |
| El Dorado County | $640,500 | $106,190 | 6.03× | stretched |
| Yolo County | $593,800 | $88,818 | 6.69× | stretched |
| Sacramento County | $498,900 | $88,724 | 5.62× | stretched |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$2,255
/ month · HUD FMR FY 2026
28.8% of median HHI
A typical 2-bedroom in costs the median household 28.8% of their income — 5.5 points above the U.S. average (23.3%) right at California (28.8%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $1,832 | $22.0K | 23.4% | comfortable |
| 2 BR | $2,255 | $27.1K | 28.8% | moderate |
| 3 BR | $3,002 | $36.0K | 38.3% | rent-burdened |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
4.8%
BLS LAUS · latest month
Sacramento's labor market is softening, with unemployment running at 4.8% — 0.8 points above the U.S. metros average (4.0%).
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
4.8%
Nonfarm jobs
—
Median household income
$93,986
ACS 5-year
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
10,338
Census BPS · trailing 12 months
+14.9% year-over-year
4.32 permits per 1,000 residents
Sacramento pulled 10,338 building permits over the trailing 12 months, a meaningful jump 14.9% year-over-year. That works out to 4.32 permits per 1,000 residents, vs the U.S. metros average of 3.49.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
7,432
trailing 12 months
2–4 unit
465
trailing 12 months
5+ unit
2,441
trailing 12 months
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 4 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01**Sacramento County leads with 6,294 permits TTM** — Sacramento proper plus Elk Grove, Folsom, Citrus Heights. 61% of the metro pipeline.
- 02**Placer County is the high-velocity exurb at 3,200 permits = 7.87 per 1,000** — Roseville, Rocklin, Lincoln. The expensive (,800 MHV) northern growth corridor.
- 03Yolo County (Davis, Woodland) adds **503 permits = 2.32 per 1,000** — slow, supply-constrained around the UC Davis core.
- 04El Dorado County (Placerville, El Dorado Hills) adds **341 permits = 1.78 per 1,000** — the wealthy foothill exurb, very low pace.
- 05Sacramento runs **4.32 permits per 1,000 residents** — above the California state median (2.39) but well below the Sun Belt average. **Permit YoY is +14.9%** — accelerating, but the migration data says builders are betting on continued Bay Area outflow that has already slowed.
How to read the map
- 01**Placer County (north — Roseville/Rocklin) is the densest at 7.87 per 1,000** — well above the metro core. Builders concentrate where the highest-income households are.
- 02Sacramento County (the core) at **3.99 per 1,000** — moderate. The 6,294 absolute permits are big but spread across 1.6M residents.
- 03Yolo County (west — Davis, Woodland) at **2.32 per 1,000** — slow. The UC Davis ag-land protection limits raw land for builders.
- 04El Dorado County (east — Placerville, foothills) at **1.78 per 1,000** — slowest. Wildfire risk and topography both constrain.
- 05**The pattern is concentrated in Placer.** The northern corridor up I-80 toward Lincoln and Roseville is doing 60%+ of the new housing per capita. Sacramento city itself is moderate; the affluent exurb is where the supply pipeline lives.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Sacramento County | 1,579,211 | $88,724 | $498,900 | 6,294 | +18.6% |
| 2 | Placer County | 406,608 | $114,678 | $658,800 | 3,200 | +17.5% |
| 3 | Yolo County | 217,141 | $88,818 | $593,800 | 503 | |
| 4 | El Dorado County | 191,713 | $106,190 | $640,500 | 341 |
Similar metros nationally
5 metros closest to Sacramento by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Sacramento is closest in size to Portland, Austin, Kansas City, Baltimore.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. Sacramento is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★Sacramento | 2.39M | $94K | $559K | 5.95× | 3.1% | +32.9% | 4.32 | -0.03% | 4.8% |
Portland-Vancouver-Hillsboro, OR-WA | 2.51M | $95K | $527K | 5.57× | 2.8% | +30.6% | 3.31 | +0.05% | 4.9% |
Austin-Round Rock-Georgetown, TX | 2.30M | $98K | $435K | 4.45× | 3.3% | +34.0% | 11.74 | +0.59% | 3.2% |
Kansas City, MO-KS | 2.19M | $82K | $265K | 3.24× | 4.0% | +51.8% | 4.11 | +0.00% | 3.5% |
Baltimore-Columbia-Towson, MD | 2.84M | $97K | $373K | 3.84× | 3.9% | +38.3% | 2.17 | -0.17% | 3.6% |
Cincinnati, OH-KY-IN | 2.25M | $79K | $240K | 3.02× | 4.4% | +57.1% | 3.52 | -0.06% | 3.6% |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
-810
tax returns · IRS SOI · TY 2022
-0.03% of metro population
8,647 from top origin
Sacramento just flipped negative on net IRS migration — losing −810 returns, −0.034% of population. For the first time in a decade the metro is no longer absorbing Bay Area outflow on net. The California exit valve has stopped working.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| Sacramento County, CA | 8,647 |
| Placer County, CA | 3,962 |
| Santa Clara County, CA | 3,158 |
| Alameda County, CA | 3,086 |
| Yolo County, CA | 2,489 |
| Contra Costa County, CA | 2,416 |
Who lives in Sacramento
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 38.3
- Owner-occupancy
- 62.5%
- Bachelor's+
- 36.3%
Sacramento relatively young Midwest metro: Median age 38.3, 62.5% owner-occupancy 36.3% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 52.7% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $93,986
- Median age
- 38.3
- Bachelor's+ degree
- 36.3%
- Owner-occupancy rate
- 62.5%
- Vacancy rate
- 7.4%
- Rent burdened (30%+)
- 52.7%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Dec 2025 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Dec 2025 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 9, 2026