Navigating the Numbers: What Today's Mortgage Rates Mean for the San Diego Market

Jan 28

For anyone with an eye on the San Diego real estate market, the daily fluctuations of mortgage rates can feel like a rollercoaster. A recent report from the Associated Press, featured in the San Diego Union-Tribune, confirms this sentiment, noting that the average long-term U.S. mortgage rate has seen a slight increase . While rates remain near three-year lows, this small shift is a reminder of the dynamic forces shaping our local market. As your trusted San Diego real estate advisors, we're breaking down what these numbers mean for you.

The National Climate: A Delicate Balance

The latest data shows the average 30-year fixed-rate mortgage inching up to 6.09% from 6.06% the previous week . While this is a welcome improvement from the 6.96% average seen a year ago, it underscores the market's sensitivity to a variety of factors, including Federal Reserve policy and global economic pressures. These rates generally follow the path of the 10-year Treasury yield, which has been volatile, reacting to everything from geopolitical tensions to shifts in international bond markets .

This environment has created a prolonged housing slump nationally, with sales hitting 30-year lows in 2022 as rates began their ascent . The combination of higher borrowing costs, soaring home prices, and a chronic shortage of housing has left many potential buyers on the sidelines. However, the recent easing of rates from their peaks has sparked a flurry of activity, with mortgage refinance applications jumping 20% in a single week .

The San Diego Story: A Market of Opportunity and Challenge

Here in San Diego, the mortgage rate environment adds another layer to our unique market dynamics. While we are seeing a slight cooling in prices, with the median sale price down 1.8% year-over-year to $930,000, the market remains intensely competitive . Homes are selling in an average of just 37 days, and buyer demand is robust .

San Diego Market Snapshot (December 2025)

Data

Year-over-Year Change

Median Sale Price

$930,000

▼ 1.8%

Median Days on Market

No Change

Sale-to-List Price Ratio

98.8%

▼ 0.073 pts

Source: Redfin

The key challenge for many San Diegans is the "lock-in effect." A staggering 69% of U.S. homeowners with a mortgage have a rate of 5% or lower, with over half enjoying rates at or below 4% . This makes the prospect of selling and taking on a new mortgage at over 6% a significant financial hurdle, which in turn keeps housing inventory tight.

Despite this, the recent dip in rates has created a window of opportunity. The slight decrease in prices, combined with a 32.4% increase in housing inventory compared to last year, has created a rare "sweet spot" for determined buyers .

Practical Advice for San Diego Buyers and Sellers

For Buyers:

Even a small change in mortgage rates can significantly impact your purchasing power. Here’s how to stay ahead:

1.Lock in Your Rate: When you find a property you love, talk to your lender about locking in your mortgage rate. This protects you from potential increases while you're in escrow.

2.Explore Different Loan Options: A 30-year fixed-rate mortgage is the most common, but it's not the only option. Ask your lender about adjustable-rate mortgages (ARMs) or other products that might offer a lower initial rate.

3.Focus on Your Budget, Not Just the Rate: While the interest rate is important, your overall monthly payment is what matters most. Work with your agent and lender to determine a budget that you are comfortable with, regardless of minor rate fluctuations.

For Sellers:

The current rate environment directly impacts the pool of potential buyers for your home.

1.Consider Offering Incentives: In a market where buyers are sensitive to interest rates, offering to pay for a rate buydown can be a powerful incentive that makes your property stand out.

2.Be Realistic About Price: While demand is still strong, buyers are more discerning than ever. A well-priced home is more likely to attract serious offers from qualified buyers who are navigating the current rate environment.

3.Highlight Value-Adding Features: Showcase energy-efficient appliances, a new roof, or other features that can help offset long-term ownership costs. This can make your home more appealing to budget-conscious buyers.

Your Partner in a Dynamic Market

Understanding the nuances of mortgage rates and their impact on the San Diego market is crucial for success. Whether you're a first-time buyer trying to make sense of the numbers or a seller looking to maximize your return, our team has the expertise to guide you through every step of the process.

Ready to explore your options? Visit our website for the latest market insights or contact us today for a personalized financial strategy.

Based on "Average US long-term mortgage rate edges higher" from the San Diego Union-Tribune, read the full article here: https://www.sandiegouniontribune.com/2026/01/22/mortgage-rates-jan-22/