San Diego’s 2025 housing market is stabilizing after years of price surges. Expect moderate growth, rising inventory, and steady mortgage rates hovering between 6% and 7%. For buyers, that means more choices, slightly better affordability, and opportunities to secure competitive San Diego home loans with the help of local experts like SD-Loans.
A Market Evolving Toward Balance
Hi, I’m Trevor Sanders, owner of SD-Loans, your trusted mortgage broker in San Diego.
Over the past few years, San Diego’s housing market has been a roller coaster—rising prices, competitive bidding wars, and shifting interest rates have all shaped how buyers approach homeownership.
But 2025 brings a different story: a more balanced market with room for smart buyers to make their move.
“2025 is shaping up to be the year of opportunity for San Diego buyers who’ve been waiting for the right time. Inventory is improving, and local lending options are stronger than ever.”
— Trevor Sanders, Owner of SD-Loans
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San Diego Housing Market Snapshot for 2025
Home Prices Are Rising — But Slower
According to local data, the median home price in San Diego hovers around $890,000 to $910,000 as of early 2025. While still high, the rate of growth has cooled to roughly 3–5% annually—down from the double-digit increases we saw during the pandemic years.
This slowdown gives buyers more breathing room and a chance to negotiate.
Inventory on the Rise
New listings have increased by about 10% year-over-year, particularly in suburban areas like Poway, Vista, and Chula Vista. This means more options and less competition for well-qualified buyers.
Interest Rates Holding Steady
Most forecasts show San Diego mortgage rates stabilizing between 6% and 7% through late 2025. While higher than historic lows, this consistency helps buyers plan more effectively.
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What’s Driving San Diego’s Housing Market in 2025
Several key factors are shaping the local real estate environment this year:
Population Growth and Military Stability
San Diego’s economy continues to benefit from a strong military presence and tech sector expansion. Bases like Camp Pendleton and MCAS Miramar anchor stable employment, while defense contracting and biotech companies attract steady migration.
Limited Land Supply
San Diego’s coastal geography limits new construction. This natural cap on inventory helps maintain property values even during national slowdowns.
Rising Income Levels
The median household income in San Diego County is now over $105,000, helping more families qualify for mid-range homes, especially when combined with smart mortgage strategies.
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Mortgage Rate Outlook: What Buyers Should Expect
The Federal Reserve has signaled a cautious approach to rate adjustments in 2025.
Projected Rate Range:
- 30-Year Fixed: ~6.5%
- 15-Year Fixed: ~5.8%
- VA / FHA Programs: Often slightly lower
While these rates are higher than pre-2020 levels, they’re stable enough to encourage long-term homebuying confidence.
If you’re planning to buy, getting pre-approved early locks in your rate and gives you a competitive edge.
Learn how to get started with the Mortgage Pre-Approval Process in San Diego.
In Chula Vista and Otay Ranch, new developments are expanding rapidly. These communities offer family-friendly amenities and competitive pricing relative to central neighborhoods.
Luxury Market
High-end buyers in La Jolla, Del Mar, and Rancho Santa Fe continue to drive jumbo mortgage activity. These areas remain resilient with limited inventory and strong resale potential.
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Neighborhood Insights: Where to Watch in 2025
North County
Communities like Carlsbad, Encinitas, and San Marcos remain strong thanks to excellent schools and coastal proximity. Expect continued price stability and steady buyer demand.
Central San Diego
Areas like Hillcrest, North Park, and Mission Valley are seeing younger buyers using FHA and VA programs to enter the market. Condos and townhomes remain the most affordable options here.
South County
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Is 2025 a Good Time to Buy a Home in San Diego?
In short: yes—if you’re financially ready.
Here’s why:
– Rising inventory means fewer bidding wars.
– Stable rates provide predictable payments.
– Slightly slower price growth gives you leverage to negotiate.
Timing the market is impossible, but positioning yourself smartly within it is not. The best approach is to get pre-approved, watch local listings, and work with a trusted broker who understands San Diego’s micro-markets.
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Buyer Trends: Who’s Purchasing in 2025
- First-Time Buyers: Using FHA and VA programs to overcome affordability barriers.
- Move-Up Buyers: Taking advantage of equity built over the last five years.
- Investors: Targeting multi-family properties and ADUs for rental income.
- Military Families: Leveraging VA loans to buy near bases like Coronado and Scripps Ranch.
The mix of buyer types shows a healthy, active market across income levels and lifestyles.
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Local Affordability Challenges
While the market is more balanced, affordability remains one of San Diego’s biggest hurdles.
- The average home price is roughly 9x the median income.
- A 6.75% rate on an $850,000 home equates to about $5,800 per month with taxes and insurance.
This makes down payment assistance and creative financing—like 2-1 buydowns or FHA loans—key tools for buyers aiming to stay within budget.
That’s where working with a local mortgage broker truly helps: we explore every path to help you qualify with confidence.
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New Construction and Development Trends
Builders are cautiously adding new supply in 2025, especially in South County and East County. Expect more townhomes and smaller-lot single-family projects to keep pricing accessible.
However, rising construction costs and zoning limits continue to constrain large-scale growth. That’s why resale homes remain highly sought after across most neighborhoods.
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Rental Market Outlook
San Diego’s rental market remains strong. Average rent sits near $3,150/month, only slightly below the cost of owning a starter home with an FHA loan.
This dynamic continues to push renters toward homeownership—especially as rental prices remain high and mortgage interest rate forecasts show stability.
Many of my clients make the switch once they see that owning in areas like Clairemont or Oceanside can cost the same (or less) than renting long term.
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How Mortgage Programs Are Adapting
Programs like FHA, VA, and Non-QM loans are evolving to meet the needs of San Diego’s diverse buyer base:
- FHA Loans: Great for first-time buyers with low down payments.
- VA Loans: Zero down options for military families.
- Non-QM Loans: Perfect for self-employed or non-traditional earners.
These flexible loan types keep homeownership within reach even as prices remain high.
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The Role of Local Expertise in a Complex Market
Every housing market is local—but San Diego takes that to another level. Coastal, suburban, and inland markets all behave differently.
That’s why working with a local mortgage expert matters. At SD-Loans, we guide clients through local lending guidelines, property taxes, and even community-specific appraisals that national banks often overlook.
“Local knowledge is everything in this city. From Point Loma to Poway, no two deals look alike—and that’s exactly why personalized mortgage guidance is so important.”
— Trevor Sanders
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Forecast Summary for San Diego’s 2025 Housing Market
| Category | 2025 Outlook |
| Home Prices | Moderate growth (3–5%) |
| Inventory | Increasing ~10% YoY |
| Interest Rates | Stable around 6–7% |
| Buyer Advantage | Balanced market, more negotiation power |
| Market Type | Gradual shift from seller’s to neutral |
| Best Time to Buy | Q2–Q4 2025 (inventory peak) |
Overall, the San Diego real estate market is moving toward long-term stability—a healthy change for both buyers and sellers.
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Tips for Homebuyers in 2025
- Get Pre-Approved Early: Strengthen your offer and lock in your rate.
- Work with Local Professionals: From mortgage brokers to realtors, choose experts who know San Diego’s neighborhoods.
- Consider Future Refinancing: If rates dip later this year, refinancing could reduce your payments.
- Explore FHA or VA Options: Flexible programs can help you buy sooner.
- Think Long Term: Focus on total value—not just today’s rate.
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Final Thoughts
The 2025 San Diego housing forecast points to a balanced, more predictable market. Prices are stabilizing, inventory is rising, and motivated buyers finally have breathing room.
If you’ve been waiting for the right time to act, this could be it.
Learn more at SD-Loans.com
Compare Best Mortgage Rates in San Diego
Or get started with the Mortgage Pre-Approval Process in San Diego
“I believe 2025 is the year smart buyers step forward. My goal is to make that process simple, strategic, and local.”
— Trevor Sanders
Call/Text (619) 855-5061 to discuss your 2025 home loan options today.
