Riding the Wave: What the Surge in Mortgage Applications Means for San Diego Real Estate
The national real estate market is sending some exciting signals, and as a San Diego real estate broker, I am here to break down what it all means for our local market. A recent article from Scotsman Guide, "Mortgage applications spike nearly 30% on sharply lower mortgage rates", has caught the attention of industry experts, and for good reason. This surge in activity has significant implications for both buyers and sellers right here in San Diego.
A National Overview: A Flood of New Applications
The Scotsman Guide article reports a staggering 29.7 percent jump in mortgage applications for the week ending September 12, 2025. This dramatic increase was fueled by a drop in mortgage rates to an 11 month low. The average contract interest rate for a 30 year fixed rate mortgage fell to 6.39 percent, prompting a flurry of activity from homeowners and potential buyers alike.
Interestingly, the majority of this surge came from homeowners looking to refinance. Refinance applications soared by almost 60 percent, accounting for nearly 60 percent of all mortgage activity. This indicates that many homeowners who may have purchased their homes in a higher interest rate environment are now seizing the opportunity to lower their monthly payments. However, purchase activity also saw a healthy increase, with the seasonally adjusted Purchase Index rising by 3 percent. This tells us that lower rates are not just motivating existing homeowners, but also encouraging new buyers to enter the market.
The San Diego Perspective: A Market Poised for Action
So, what does this national trend mean for us in San Diego? The simple answer is that we are likely to see a similar uptick in activity. The San Diego real estate market is notoriously sensitive to interest rate fluctuations, and a drop in rates is often the catalyst that brings buyers back to the table.
Currently, the median price for a single family home in San Diego County is approximately $1.4 million. While this may seem daunting, it is important to remember that even a small decrease in interest rates can have a significant impact on a buyer's purchasing power. For example, a 1 percent drop in interest rates on a $1 million loan can save a homeowner hundreds of dollars per month. This increased affordability can make all the difference for buyers who may have been on the fence.
Furthermore, the San Diego market has seen a significant increase in inventory over the past year. The number of active listings is up by 47 percent compared to 2024. This, combined with the recent drop in mortgage rates, creates a unique window of opportunity for buyers. For the first time in a long time, buyers have both more options to choose from and more affordable financing options.
Practical Advice for Buyers and Sellers
For those looking to buy a home in San Diego, my advice is simple: act now. The current combination of lower interest rates and increased inventory is a rare opportunity. Get pre approved for a loan to understand your budget and be prepared to make a competitive offer when you find the right property. With more buyers entering the market, the competition is likely to heat up in the coming months.
For sellers, this is an excellent time to list your home. The increase in buyer demand means that there will be more eyes on your property. However, it is crucial to price your home competitively. The days of multiple offers significantly above asking price are becoming less common. A well priced home in good condition will attract serious buyers and sell in a timely manner.
Your Trusted San Diego Real Estate Partner
The San Diego real estate market is dynamic and ever changing. By staying informed about the latest trends and data, you can make informed decisions that will help you achieve your real estate goals. Whether you are a first time homebuyer or a seasoned investor, our team is here to provide you with the expert guidance and personalized service you need to succeed. Visit our website to learn more about the San Diego market and to start your home buying or selling journey today.