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Rates Are Cooling Down — But What Does That Really Mean For San Diego?

Rates Are Cooling Down — But What Does That Really Mean For San Diego?

The Big Story

  • Quick Take:
    • Affordability remains an issue nationwide, as monthly P&I payments ticked up by 2.90% year-over-year.
    • Mortgage rates are finally starting to decline, as we enter a rate-cutting cycle.
    • Inventories are still growing at a faster rate than existing home sales.
    • Quick observation about Macroeconomics/The Broader Market
     
    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.

🌤 A Shift Is Finally Happening

If you’ve been watching mortgage rates creep higher all year, here’s some refreshing news: the Fed just announced a rate cut — and more are expected before year’s end.
 
That may sound small, but for San Diego buyers, even a quarter-point drop can mean:
  • Hundreds saved each month on payments
  • Increased purchasing power for first-time buyers
  • Renewed activity in open houses and pre-approvals
It’s the first sign that the market may finally be catching its breath after a long stretch of high-rate fatigue.

💸 Affordability Is Still a Battle — But Buyers Have Leverage

Let’s be real: affordability in San Diego is still a challenge. But here’s the silver lining — inventory is growing.

More homes are sitting longer, especially in mid-range price points around $800K–$1.1M.
That gives buyers something we haven’t seen much of lately: room to negotiate.

✅ For buyers:

  • You might get closing costs covered
  • You could avoid bidding wars on coastal condos
  • You’ll have more options to explore before rushing an offer


💼 For sellers:

  • Smart pricing and strong presentation are key
  • Homes that show well and hit the market competitively are still moving quickly — especially near the coast

🌴 San Diego’s Coastal & Inland Markets Tell Two Stories

Coastal communities like Encinitas, Carlsbad, and La Jolla are holding their value thanks to:
  • Low inventory
  • Lifestyle-driven demand
  • Strong equity positions from long-term owners
Meanwhile, inland markets — such as Murrieta, Menifee, and Vista — are seeing:
  • More new listings
  • Price adjustments creating opportunities for buyers
  • Growing interest from those seeking more space or value
So whether you’re chasing ocean breezes or bigger backyards, there’s opportunity on both sides of the 15.

 🔮 What’s Next: The Calm Before the 2026 Rush?

Here’s our take: if rates continue dropping into early 2026, we could see another “mini-frenzy” by spring.
 
📈 What to watch for:
  • Lower rates = more buyer activity
  • Sellers listing now may face less competition
  • Well-prepared buyers will move fast when inventory tightens again
Buyers who prepare now — by getting pre-approved, exploring options, and staying rate-aware — will be ahead of the curve once competition returns.
 

👋 Let’s Talk About Your Market

Every zip code tells its own story. Curious what this means for your neighborhood or your 2026 plans?
 
Email us—we’ll help you:
  • Make sense of the numbers
  • Evaluate your options
  • Plan your next move with confidence

Big Story Data

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