Rising interest rates are leading to a slower housing market in San Diego.
“It’s put a big damper on demand,” Jon Fields, a realtor with Keller Williams Realty San Diego Metro, said. He’s been a real estate agent in San Diego for a decade.
Fields said buyers who were once willing to get into bidding wars, with offers way above asking price, are now hesitant to get into the market.
“The market is still moving along, don’t get me wrong. But it’s not that 10-to-15 offers (are received) over the course of a weekend,” he said. “It’s more like maybe you put your home on the market on a Thursday, and maybe it takes a week or two to get a couple (of) offers or to get any offers.”
Fields said what he’s telling his clients is that the market is now simply “normalizing.”
The Federal Reserve raised interest rates again today, pushing them up by half a percentage point in an effort to fight inflation. It’s the seventh increase since March. Back then the benchmark was near zero, and now it’s just under 4.5%.
Matt Ficco, the CFO of California Coast Credit Union, said there was a borrowing frenzy in early 2022, when interest rates were near zero, and that it continued through late summer. But, he said, “Since then, when these rate hikes that really started to kick in we saw the volume started to taper off.”
Ficco said all those rate hikes, in a market where the median home price is $850,000, meant monthly payments were no longer affordable for many.
“If you’re buying a same house today that you bought a year ago, your monthly payment is now up by maybe $1,000 — even more in some cases. So it’s a significant increase to the consumer,” he said, adding that