San Diego Home Sales Fall Amid Higher Mortgage Rates
Buyers in San Diego face 7.4% interest rates as the local housing market sees sales dip 9.3% and inventory rise.
Updated on Oct. 27, 2026 in Residential
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Given current interest rates and home prices, is now a good time to buy a home?
San Diego home prices grew 2.29% annually as of August 2026, though rising interest rates have cooled overall market activity. Closed home sales in San Diego County fell 9.3% annually by September 2026 as median prices for single-family homes held near $1 million.
Why it matters
Higher mortgage rates, inflation, and increased gas prices are stretching buyer affordability for local households. These factors are leading to a softening market where inventory is rising to 8,043 available homes.
As of September 2026, San Diego County inventory reached 8,043 homes, while 30-year fixed-rate mortgages climbed to 7.4% in early October. Median prices for local single-family homes remain steady at approximately $1 million.
The players
S&P CoreLogic Case-Shiller Index
A widely followed benchmark that tracks the value of U.S. residential real estate using a repeat-sales methodology.
The details
The Case-Shiller index measures price shifts by tracking repeat sales of identical single-family homes using a three-month rolling average. In this softening market, buyers are increasingly leveraging seller credits to manage costs. These concessions include price reductions, closing cost assistance, and temporary rate buydowns to offset high borrowing expenses.
Timeline
June 2026: San Diego ranked 10th in the national index.
August 2026: Home prices increased 2.29% annually.
September 2026: Closed home sales decreased 9.3% annually.
Early October 2026: 30-year fixed-rate mortgages reached 7.4%.
The Home Front
San Diego remains a high-value market, currently ranking 7th in the 20-city S&P CoreLogic Case-Shiller Index for price growth. This reflects a broader trend of price resiliency despite the significant headwinds caused by national mortgage rate spikes.
Prospective buyers should explore seller credit options like rate buydowns to manage current high mortgage interest rates. Homeowners considering a sale should monitor the rising inventory levels in the county, which may affect pricing strategy.
The takeaway
The local housing market is shifting toward a buyer-friendly environment as high interest rates suppress sales volume. If you are entering the market, prioritize calculating your total monthly costs against a 7.4% mortgage rate rather than focusing solely on the $1 million median home price.
Further reading
For a deeper look at local market trends, visit our Residential section.
Source note: This article includes information reported by San Diego Union-Tribune.
Live Poll
Given current interest rates and home prices, is now a good time to buy a home?
