Falling Rates Continue To Ease The Affordability Crunch

The Big Story

Quick Take:

Median home sale prices are virtually flat on a year-over-year basis, as the market has settled into a holding pattern despite lower mortgage rates.
Inventory levels remain slightly elevated compared to last year, but the gap continues to narrow.
Existing home sales have pulled back on both a month-over-month and year-over-year basis, signaling that buyers are still waiting on the sidelines.

💸 Falling Rates Are Improving Affordability

Mortgage rates continue to trend down, and it’s starting to make a real difference. The average 30-year rate dropped to 6.11% from 6.89% last year, helping bring the median monthly payment down to about $1,952 — roughly $165 less per month.

At the same time, home prices have stayed relatively steady at $398,000, with only slight movement month-to-month and year-over-year.

For San Diego buyers, this creates a window where affordability is improving — and if rates continue to ease, we could see more buyers re-enter the market heading into spring and summer.

🏠 New Listings Are Picking Up

We’re seeing a strong surge in new listings as the spring market ramps up.

439,000 new listings in March
Up 21% from last month
Slight increase year-over-year

Inventory is also building gradually, giving buyers more choices. While we’re still below what’s considered a fully balanced market, this is a step in the right direction — especially for buyers who’ve been waiting for more options.

👀 Buyers Are Starting to Move — Slowly

After a slower start to the year, home sales showed a bit of improvement in February, reaching 4.09M homes sold.

That said, sales are still slightly below last year’s levels, which tells us buyers are moving, just carefully. Many are still waiting to see if rates drop further or if more inventory becomes available before making a decision.

⚖️ A Market Shifting Toward Balance

With inventory rising, new listings surging, and sales still lagging slightly, the market is slowly moving toward a more balanced state.

Historically, around 3 months of inventory signals balance. While we’re not fully there yet, conditions are improving, giving buyers more breathing room than we’ve seen in years.

At the same time, this balance could shift quickly. If rates continue to fall and buyers jump back in, competition could pick up again and push the market back toward sellers.

🌴 Local Take

While these are national trends, San Diego tends to react faster due to strong demand and limited supply.

If you want to see how this is playing out in your neighborhood — whether you’re buying, selling, or just keeping an eye on your equity, I’m happy to break it down for you.