Rates Drop 1% in Last 3 Months

Americans are feeling more confident about the housing market at the beginning 2024 as buyers and sellers start seeing a glimpse of hope at the end of the tunnel.  The tug of war over San Diego being a buyers or sellers market will likely continue this year but more palatable mortgage rates and projected upticks in inventory could open the door for buyers.  While rates had a slight uptick in the first week of the year, easing inflationary pressure and a soft economic outlook prompted many to believe that mortgage rates will improve, albeit slowly, in the next 12 months. 

The housing market should see a bounce back in activity in the coming months if the sentiment can maintain its upward momentum.  The improvement, however, will more than likely be gradual as tight housing supply remains the norm in 2024.  There's an expectation for interest rates to continue to drop, which will renew interest from buyers and sellers that should help boost our local supply. 

In the past 2 months, the average 30-year fixed rate mortgage dropped by around 1%.  "That's significant as far as the housing market is concerned, particularly in an area like San Diego where housing prices are so high," University of San Diego Economics Professor Alan Gin said. "So, if you take the median price of a house in San Diego, an 80% loan, that drop in interest rates will save the buyers almost $600 per month in terms of payments."  Lower mortgage rates won't clear all buyer hurdles, and could actually push home prices higher if demand surges and inventory remains low. 

Total units sold in 2023 in San Diego county was 21,886 compared to 28,574 in 2022.  That's a gap of almost 6,700 units sold / transactions that San Diego missed in 2023 all due to lack of inventory which allowed prices to remain stable and increase over the year.  As of January 16th there are almost 2,600 homes actively listed on the market which is very low. 

Affordability is a major topic of discussion but many are finding solutions to purchase a home today.  Sellers still remain in a very strong position as homes are still selling and receiving multiple offers depending on price / location but pricing a home correctly is critical.  Call me at 858-220-6412 so we can discuss your plans to buy or sell a home in this ever changing market.