After a stretch of high mortgage rates, quiet listings, and buyers waiting on the sidelines, the housing market in San Diego is finally showing momentum again. Sellers are stepping forward. Buyers are re-evaluating what’s possible. And for the first time in a long while, the market isn’t stuck shifting.
We’re not talking about a fast, dramatic surge. But we are seeing the early steps of a meaningful comeback that could build stronger momentum in 2026.
So, what’s behind the change? Here are three big trends quietly reshaping the market right now.
1. Mortgage Rates Are Trending Down
Rates fluctuate all the time, totally normal. But zoom out, and you’ll see the broader trend: rates have taken a noticeable dip over most of the year, with some of the best mortgage conditions buyers have seen in 2025.
Freddie Mac’s Chief Economist, Sam Khater, explains why this matters:
“On a median-priced home, this could allow a homebuyer to save thousands annually compared to earlier this year, showing that affordability is slowly improving.”
For San Diego buyers, that improvement means:
- More buying power
- A lower monthly payment
- Access to homes that may have been out of reach just months ago
Redfin’s data even shows that a buyer with a $3,000 monthly budget can now afford roughly $25,000 more home than a year earlier.
Small market shifts can create big financial advantages.
2. More Homeowners Are Finally Listing Their Homes
For years, many homeowners stayed put because of the “lock-in effect”, the reluctance to give up a low mortgage rate.
But as rates ease and life changes take priority, more San Diego homeowners are deciding it’s time to move. And that’s exactly what coastal buyers have been waiting for.
Realtor.com data shows inventory growth approaching levels not seen in nearly six years.
More inventory means:
- More options
- More negotiation opportunities
- A healthier balance between buyers and sellers
When people move for the right reasons, such as career changes, growing families, downsizing, or relocating, it strengthens the entire market.
3. Buyers Are Re-Entering the Market
It’s not only sellers stepping forward. Buyers are returning as affordability improves and more listings hit the market.
The Mortgage Bankers Association reports purchase applications are up year-over-year, a clear sign that demand is building again.
Economists at Fannie Mae, the MBA, and the National Association of Realtors all project steady growth in home sales heading into 2026.
Not a rush. Not a frenzy. But a measured, sustainable return to a more active and more balanced market.
For many who’ve been waiting on the sidelines, this is the shift they’ve been hoping for.
Bottom Line
After several quieter years, the housing market in San Diego is beginning to gain real traction again.
Lower mortgage rates, growing inventory, and stronger buyer activity are paving the way for meaningful movement heading into 2026.
We’ve sold thousands of homes across La Jolla, and the North County coastal communities like Del Mar, Encinitas, Solana Beach, Carlsbad, Cardiff, and Rancho Santa Fe, and many more throughout the city of San Diego. We’re the #2-ranked real estate team per the SDBJ for medium teams in 2024, serving clients across all of coastal San Diego, and the #2-ranked medium team by volume in San Diego for 2024, per RealTrends. With over 2,150 homes sold and $3.778B in career sales, we bring insight, discretion, and strategy to every transaction—whether you’re listing a bluff-front estate or relocating within your own neighborhood.
The market is turning a corner. When you’re ready, Maxine & Marti Gellens can help you turn the right way with it.