A Glimmer of Hope for Buyers: Mortgage Rates Dip to Three-Year Low
For the first time in over three years, the average long-term U.S. mortgage rate has dipped back to the cusp of the 5% range, settling at 6.01% this week. This modest but psychologically significant drop offers a glimmer of hope for homebuyers who have been sidelined by high borrowing costs. While rates have been trending downward for months, this latest move brings them to their lowest point since September 2022, a welcome sign as we head into the spring buying season .
As your San Diego real estate specialists, we’re here to unpack what these numbers mean for our local market and for your homeownership goals.
The National Picture: A Market in Search of Momentum
The national housing market has been in a slump since 2022, when mortgage rates began their steep climb from historic lows. Despite the recent dip in rates, the market has yet to regain its footing. Sales of existing homes remain at 30-year lows, and pending home sales, a key indicator of future activity, also declined in January. As Lawrence Yun, Chief Economist for the National Association of Realtors, noted, “Improving affordability conditions have yet to induce more buying activity” .
The primary culprit is a familiar one: a chronic shortage of homes for sale, coupled with prices that, despite some softening, remain elevated. This has created a challenging environment for buyers, where even a small drop in mortgage rates can feel like a significant win.
What This Means for San Diego Buyers and Sellers
In a high-cost market like San Diego, mortgage rates have an outsized impact on affordability. A lower rate can translate into a lower monthly payment, which can make all the difference for buyers on the bubble. The current 30-year fixed rate of 6.01% is a marked improvement from the 6.85% average of a year ago, potentially expanding the pool of qualified buyers.
For Buyers: This is a moment of opportunity. While we don’t expect a return to the frenzied market of the pandemic years, lower rates could bring more competition. The key is to be prepared. Getting pre-approved, knowing your budget, and working with an experienced local agent will put you in the strongest possible position. As Lisa Sturtevant, Chief Economist at Bright MLS, suggests, we should see more buyers this spring as inventory and weather improve .
For Sellers: The dip in rates is good news for you, too. It means more potential buyers for your property. However, it’s important to remember that buyers are still price-sensitive. A well-priced home in good condition will attract the most attention. This is not a market where you can simply name your price. Strategic pricing and marketing are more important than ever.
For Homeowners: If you have an existing mortgage with a higher rate, now is an excellent time to explore refinancing. The average rate on a 15-year fixed-rate mortgage, a popular choice for refinancing, has also fallen to 5.35%. Refinancing could lower your monthly payment and save you a significant amount of money over the life of your loan.
Looking Ahead: The Fed, Inflation, and the Spring Market
Mortgage rates are closely tied to the 10-year Treasury yield and the Federal Reserve’s monetary policy. The Fed has paused its rate cuts for now, waiting for more conclusive evidence that inflation is under control . This means that while rates have come down, they could remain volatile. We are cautiously optimistic that rates will continue to trend in a favorable direction, but there are no guarantees.
As we enter the spring buying season, the combination of lower rates and historically low inventory could create a competitive environment. If you are thinking of buying or selling in San Diego this year, now is the time to start the conversation. Contact us today for a personalized consultation to discuss how you can take advantage of the current market conditions.
Based on reporting from the San Diego Union-Tribune, read the full article here: https://www.sandiegouniontribune.com/2026/02/19/mortgage-rates-feb-19/