As we move through the second half of 2025, the real estate landscape continues to shift, shaped by mortgage rate volatility, persistent affordability challenges, and limited inventory. Here’s a comprehensive look at the market, backed by expert insights and local data, to help guide your next move.

Mortgage Rates Are Cooling and Could Pick Up Speed This Fall

After peaking in late 2023, mortgage rates have been gradually easing, though they remain higher than many buyers had hoped. As of August 2025, the average 30-year fixed rate is 6.63%, the lowest since April.

While most forecasters, including Fannie Mae and Goldman Sachs, expect rates to stay in the mid-6% range through year’s end, JPMorgan now projects the Federal Reserve could begin cutting interest rates in September three months earlier than previously anticipated, citing a cooling labor market and shifting economic signals. If that timeline holds, mortgage rates could trend toward 6% even sooner, potentially sparking renewed buyer activity this fall.

Home Prices Continue Rising, But at a Slower Pace

Despite elevated rates, home prices are still trending upward—though the pace of appreciation has eased.

“Prices will rise 3.2% this year. Limited inventory is the driving factor, not demand strength.”
— Goldman Sachs via Business Insider

Local Inventory Snapshot

Real estate is hyper-local, and the latest data shows significant differences across San Diego’s most desirable communities:

Rancho Santa Fe (92067) — 8.6 months of inventory, leaning toward a buyer’s market.
Carmel Valley (92130) & Carlsbad SE (92009) — Tight supply at just 2–3 months, favoring sellers.
La Jolla, Del Mar, and Poway — Currently balanced, offering room for strategic negotiation on both sides.

Historical Context: Inventory Still Trails Pre-COVID Levels

To better understand today’s market, it helps to compare current inventory levels with pre-pandemic years. Across nearly every ZIP code tracked, 2025 inventory is higher than in 2023 but still far below 2018–2019 levels.

While the market has moved away from the extremes of the pandemic-era boom, 2025 is shaping up to be a year of stability with steady gains. The potential for Federal Reserve rate cuts starting as early as September could ignite fresh momentum this fall, especially in the luxury segment where prepared buyers move fast.

If you are considering a purchase or sale, now is the time to partner with the #1 team in North County San Diego—delivering unmatched expertise, strategic guidance, and results that speak for themselves.