A year ago, many homebuyers across San Diego ran the numbers and decided to wait.
Between higher mortgage rates and rising home prices, the monthly payment simply didn’t feel comfortable for many people looking in neighborhoods like North Park, South Park, University Heights, and surrounding metro communities.
But today, the math looks a little different.
According to Zillow, a median-income household can now afford about $30,000 more home than they could a year ago.
The main reason? Mortgage rates have come down.
Last winter, rates were hovering near 7%. Recently, they’ve eased to around 6% and even dipped to about 5.99%. While that may not seem like a huge shift at first glance, even a small drop in rates can make a noticeable difference in what buyers qualify for.
And here in San Diego’s metro neighborhoods, where every dollar of purchasing power matters, that change can open up new possibilities.
At the McT Real Estate Group, we’re already seeing buyers revisit neighborhoods and price ranges they had previously ruled out.
You May Qualify for More Home Than You Think
If you looked at homes last year in North Park, South Park, or nearby communities and felt like your budget was limiting your options, now may be a good time to run those numbers again.
Earlier in 2025, mortgage rates averaged around 6.96%. Today they’re closer to 5.99%.
That difference can translate into a noticeable increase in purchasing power.
For example, let’s say a buyer is comfortable with a $3,000 monthly housing budget.
- With a 5.99% mortgage rate, that buyer could potentially afford a home around $479,750.
- At the start of the year, when rates were closer to 6.2%, that same budget would have supported a home around $471,750.
- A year ago, with rates near 6.9%, it would have been closer to $446,000.
That’s about $33,000 more purchasing power compared to last year, simply because mortgage rates have eased.
(Example assumes 20% down, 30-year mortgage, 1.25% property tax rate, 0.5% homeowners insurance rate, and no HOA.)
Of course, San Diego home prices vary widely by neighborhood, especially in urban areas like North Park, South Park, and Golden Hill. The only way to know what this means for you personally is to run updated numbers based on today’s rates, your income, and current local home prices.
That’s something the McT Real Estate Group team helps buyers do every day.
What This Means for Buyers in North Park, South Park, and Metro San Diego
If you put your home search on hold over the past year, now might be a good time to take another look.
Nationally, buyers now need about $111,000 in income to afford the typical U.S. home, which is about 4% lower than last year. Affordability is improving in many major metros, and San Diego is starting to feel some of that shift as well.
For buyers exploring walkable, central neighborhoods like North Park, South Park, Normal Heights, and University Heights, this could mean a few things:
- Rechecking what you qualify for at today’s rates
Your purchasing power may be stronger than it was last year. - Expanding your search slightly
Homes that were just outside your budget before may now be within reach. - Watching listings that have been sitting longer
In some cases, sellers are more open to negotiation than they were during the peak frenzy of past years.
For current homeowners, the shift in rates could also create opportunities to refinance and lower a monthly payment, depending on when the home was purchased.
The Bottom Line on the 5.99% Mortgage Rate
Buying a home in San Diego has never been about rushing into the market or stretching your budget to the limit. The goal isn’t to become house-poor-it’s to make a smart move that fits your finances and lifestyle.
The encouraging part right now is that the numbers are starting to move in a more buyer-friendly direction.
Lower mortgage rates combined with slower price growth are creating opportunities that weren’t there a year ago.
If you’re curious about what you could realistically afford today in North Park, South Park, or surrounding San Diego neighborhoods, the best first step is simply running the numbers based on current rates and real local prices.
The team at the McT Real Estate Group is always happy to help buyers break down the numbers and create a clear plan for navigating San Diego’s housing market.
Once you have that clarity, deciding on your next move becomes much easier.