There’s a lot going on in the housing market lately, both nationally and right here in San Diego County. Mortgage rates have been moving around, pending sales are showing signs of life, and inventory levels remain tight.
In this week’s update, we’ll look at what’s happening across the country, what’s going on in California, and of course, how our local San Diego market is performing.
📈 National Housing Snapshot: Pending Sales Finally Pick Up
Let’s start with some good news. Pending home sales rose 4% from July to August and are up 3.8% year-over-year, according to the National Association of Realtors.
Why? Mortgage rates dipped slightly, and that little drop was enough to bring some buyers back into the market. Pending sales increased in the Midwest, South, and West, everywhere except the Northeast.
Still, things aren’t exactly booming. Even with the uptick, pending sales remain well below normal levels compared to the 20 years before 2021. In other words, activity is better, but not back to what we’d consider “healthy.”
💰 Mortgage Rates: A Bit of Relief (and Some Hope Ahead)
If you’ve been following the headlines, you know mortgage rates have been a rollercoaster lately.
After creeping into the low 6s, they’re now hovering around 6.37%.
That small dip followed a weaker-than-expected jobs report instead of adding 50,000 new jobs, the economy lost about 32,000. A softer job market often pushes investors toward safer assets like Treasury bonds, which drives down yields and helps lower mortgage rates.
Looking ahead, there’s a Federal Reserve meeting scheduled for October 29, and experts are giving it about a 90% chance of another rate cut. Some lenders may even start reducing their rates before the meeting in anticipation.
So if you’re thinking about buying, it’s worth keeping an eye on rates in the coming weeks. Even small changes can impact your monthly payment in a big way.
🏠 California Market Forecast: Small Gains, Steady Growth
The California Association of Realtors recently released its 2026 housing market forecast, and while there’s no major surge ahead, the outlook is modestly positive.
Home sales are projected to rise 2% statewide next year, while the median home price is expected to increase by 3.6%, reaching around $905,000.
To put that into perspective:
- 5 years ago, the median price in California was $659,000
- Last year, it was $865,000
- Next year, it could climb to around $905,000
During the pandemic, prices skyrocketed anywhere from 25% to 50%, depending on the area. So, while this forecasted growth feels mild, it’s actually a welcome sign of stability after several years of wild swings.
🌴 San Diego County Snapshot: Prices Holding Steady
Now let’s get local. The median home value in San Diego County currently sits around $958,000. That’s down just 0.1% from last year, so prices have essentially held steady.
Here’s what else is happening across the county:
- Median list price: $899,000 (down 2.8% month-over-month)
- Active listings: About 3,312 homes on the market (down 14%)
- Median days on market: 43 days for active listings
- Pending homes: 26 days on average before going under contract
- Sold homes: Median price of $911,000, selling in about 25 days
- List-to-sold ratio: 98%, meaning most homes are selling close to their asking price
Even though prices aren’t jumping, homes are still moving and quickly when they’re priced right and well-presented.
🚧 The Bigger Issue: California Isn’t Building Enough Homes
Here’s the part that’s raising eyebrows. A recent San Diego Union-Tribune article revealed that California has the 7th-slowest housing creation rate in the U.S.
Between 2019 and 2024, California’s housing supply grew by only 7%, while Texas grew 15% and Florida jumped 19%.
That’s a serious imbalance. California actually has the largest number of housing units in the country, 13.8 million, but we’re still not building enough to meet demand or ease affordability challenges.
For buyers, this means fewer homes to choose from, higher prices, and intense competition.
For sellers, limited supply gives you an advantage, at least in the short term.
The long-term concern? If prices continue to rise faster than incomes, fewer qualified buyers will be able to enter the market. That can lead to slower sales, market stagnation, and eventually downward pressure on prices.
🔍 What This Means for You
If you’re a buyer:
The market is still competitive, especially in areas like North County and Poway. Watch mortgage rates closely and be ready to act if they dip below 6%. A quick preapproval and a responsive agent can make all the difference.
If you’re a seller:
You still have leverage with inventory levels this low, but pricing strategy matters more than ever. Overpricing your home can lead to longer days on market and fewer offers, while strategic pricing can create strong demand and multiple offers.
💬 Final Thoughts
The San Diego housing market continues to walk a fine line. Rates are easing slightly, inventory is tight, and prices remain stable. Whether you’re buying, selling, or just watching the market, staying informed helps you make the best decision for your next move.
If you’d like to know what your home is worth in today’s market or see how it might appreciate next year, you can request a home valuation here or reach out to me directly.
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See you next week for another San Diego Housing Market Mondays!
