Most people have read about the current situation with the housing market, how mortgage rates still remain high and how our market conditions still remain challenging up to now. Well here’s the thing, the majority of headlines fail to report on the small indications that the housing market is showing some new activity.
The number of mortgage purchase applications continues to grow compared to last year despite interest rates exceeding 6.5% because homebuyers are beginning to show interest again. It’s not a boom. It’s not a frenzy. But it is something to take note of.
What Are Mortgage Purchase Applications?
The term “Mortgage purchase applications” describes the loan application process for homebuyers who want to finance their property purchases. The indicator leads actual home sales by 30 to 90 days, which makes it an excellent tool for detecting market changes before they become news headlines.
In the first 10 weeks of 2025, we’ve seen:
- 4 positive weeks
- 3 flat weeks
- 3 negative weeks
That might not sound groundbreaking, but most of the weekly data this year is positive, and we’re seeing year-over-year growth for the first time in a long while.
And applications go up, it’s often a sign that more people are getting serious about buying.
Peak Home Sales Came Early in 2023 and 2024
The real estate housing market experienced an initial increase in home sales during both 2023 and 2024 before sales gradually decreased throughout the year. Why?
It came down to mortgage rates.
Mortgage rates exceeded 8% during the late part of 2023 but then decreased to approximately 6.63% during January 2024. The interest rate decrease provided buyers with temporary relief, which led to increased market activity. The market activity decreased when interest rates began to increase.
The sales peaks during both 2023 and 2024 occurred early because homebuyers responded to brief periods of reduced interest rates. The buyers disappeared after the lower interest rates vanished.
Why 2025 Housing Market Feels Different
The year stands out because mortgage applications are increasing despite interest rates remaining steady. The 30-year fixed mortgage rate has reached approximately 6.7% during mid-March 2025, which exceeds the desired levels of most homebuyers.
The current interest rates appear more bearable compared to the 8% market seen during late 2023.
According to Logan Mohtashami from HousingWire Daily Podcast:
“Unlike the last few years when rates have gone up and purchase application data is negative, it’s still positive on the weeklies and the year over year. It was a long time ago since I’ve been able to say that.”
The housing market could experience increased demand if mortgage rates move toward 6% and remain stable at that level, according to many experts.
Final Thoughts on the Housing Market this Spring
The upward trend in mortgage purchase applications shows that buyers remain interested in the market even with constant mortgage rates. The San Diego real estate market demonstrates the same upward trend as the national market. North Park and South Park, along with nearby metro communities, attract San Diego homebuyers who have returned to the market. The areas experience rising buyer interest despite mortgage rates staying at approximately 6.7%. The neighborhoods maintain stable home values because buyers continue to show interest in the market.
Recent data shows that open house attendance has grown, and homes are selling faster in popular neighborhoods in San Diego than they did in late 2024. The real estate market shows consistent interest in single-family homes together with condos and small multifamily properties that have 2 to 4 units.
What does this mean for you?
The current market conditions provide San Diego residents with an opportunity to buy or sell real estate. The market’s revival brings back buyers, which creates selling opportunities for homeowners. Your local San Diego real estate expert will provide timely, neighborhood-specific insights while you monitor the market closely and remain proactive.
