What a 1 Percent Rate Drop Means for San Diego Home Prices
What a 1% Rate Drop Means for San Diego Home Prices
When mortgage rates move, the San Diego housing market reacts almost immediately. A single percentage point shift in mortgage rates can dramatically change affordability, buyer demand, and home prices across San Diego County.
The Quick Math
Let’s say you’re buying a $900,000 home with 10% down.
- At 7.25%, your monthly principal and interest is roughly $5,525.
- At 6.25%, that drops to around $4,950.
That’s a $575/month savings — or nearly $7,000 per year. In simple terms, a 1% rate drop can increase buyer purchasing power by roughly 10%.
Impact on Home Prices
When affordability jumps, so does demand. Buyers who were previously priced out suddenly re-enter the market, often creating a surge in competition. Historically, a 1% rate drop has led to 3–5% home price appreciation in high-demand areas like coastal and central San Diego.
For Sellers
If you’re thinking about selling, timing your listing around a rate drop can be a huge advantage. When rates fall, more buyers qualify — and many listings sell faster and closer to (or above) asking price. Or sell a home today that didn't sell a few months ago.
For Buyers
Waiting for prices to “drop” can backfire. When rates dip, competition increases. The best strategy is to buy now, while others hesitate, and refinance later when rates improve. You’ll lock in the right home and still capture savings when the next rate drop hits.
The Bottom Line
- A 1% rate drop can raise affordability by 10% or more.
- Prices often rise 3–5% shortly after rates fall.
- Timing your move can mean tens of thousands in gain or loss.
Want to see what this means for your specific home or price range?
Or just call/text me directly — I’ll show you how this 1% shift affects your buying power or home value.
Call/Text George at 619-846-1244
George Lorimer | Your Home Sold Guaranteed or I’ll Buy It!*
ProWest Properties | DRE# 01146839 | *Conditions apply