Like elsewhere throughout the country, interest rates in San Diego have risen dramatically within the past few years. It is a trend that impacts individual buyers and sellers while also having more of an effect on the overall real estate market than many people realize.
That said, here’s a breakdown of how to navigate San Diego’s real estate market in our current high-interest world.
As of October 2023, San Diego’s mortgage interest rates are as follows
For the sake of comparison, the average mortgage rates for the state of California in December 2020 were as follows:
As you can see, mortgage rates have risen in a short time, and given that homes in San Diego tend to be costly (the median price is $930,000 ), even a 10% down payment isn’t feasible for many. Combining a high-interest rate, the monthly mortgage payment and the total home purchase cost can price some homeowners out of the market altogether.
For example, if you were looking to purchase a $930,000 home with a 20% down payment and a 30-year fixed mortgage in December 2020 (at a rate of 2.500%), your total cost (excluding taxes, fees, and other expenditures) would be approximately $1,058,292. If you were making that same purchase with today’s rate of 7.580%, you would pay just about $1,887,470.
Interest rates in San Diego make house hunting substantially difficult, but it doesn’t have to be impossible. Here are a few tips to keep your costs to a minimum:
Between rising home prices and rising interest rates, some sellers are having trouble finding buyers. As a result, some are more willing to make a few concessions to make a sale.
Lowering your interest rates even very slightly in such a high-priced market can make a major difference. Improving your credit score is one of the best ways to secure a lower rate. Do your best to lower your debt-to-income ratio and resolve any errors on your report.
An adjustable-rate mortgage leaves the possibility that your rate may lower over time. However, these mortgages aren’t without risk, so it’s essential to evaluate your situation holistically before making a decision.
It might seem like the mortgage a lender offers you is your only option, but if you have a strong overall credit profile, trying to negotiate a better rate might be worthwhile.
High interest rates can be discouraging, but when you work with the right real estate experts , it’s still possible to find your dream home for a fair price.Contact The Selby Team to get the ball rolling toward finding your new home.