As the leaves start to turn and the air gets a little crisper (at least in some places!), the real estate market is shifting too – and not just in subtle ways. Buyers are rethinking their strategies, sellers are adjusting expectations, and I’m staying sharp to guide clients through what’s becoming a very dynamic landscape.
Working closely with both buyers and sellers, I’ve seen firsthand how important it is to offer clear, honest advice – especially now, as we head into the final quarter of 2025.
For the past couple of years, many homebuyers have felt stuck on the sidelines. Home prices surged, mortgage rates climbed, and it often seemed impossible to make the numbers work. Sound familiar? You’re not alone.
But here’s some good news: affordability is starting to improve this fall, and that could be welcome news whether you’re buying or selling.
A Little Relief in the Numbers
Recent data from Redfin shows the typical monthly mortgage payment has dropped by about $290 compared to just a few months ago. That’s a meaningful change for buyers planning their budgets – and for sellers, it signals renewed interest from qualified buyers.
The cost of owning a home boils down to three key factors: mortgage rates, home prices, and wages. Right now, all three are moving in a more favorable direction. Here’s what that means for you:
1. Mortgage Rates Are Easing
The 30-year mortgage rate recently fell to its lowest point since October 2024. This drop follows slower job growth and other economic indicators that hint at potential Federal Reserve rate cuts later this year. Lower rates mean buyers can afford more home for the same monthly payment – or save money on their current home purchase.
2. Home Price Growth Has Moderated
After years of rapid price increases, home price growth has finally slowed. According to Odeta Kushi, Deputy Chief Economist at First American:
“National home price growth remains positive, but muted – low single digits – and we expect this trend to continue in the second half of the year.”
For buyers, this moderation makes it easier to plan their budgets. In some markets, prices have even dipped slightly, opening opportunities to purchase homes that might have been out of reach before.
For sellers, it’s a chance to leverage built-up equity. Over the last five years, home prices nationwide have increased nearly 54%, according to the Federal Housing Finance Agency (FHFA). That equity isn’t just a number; it’s a tool that can help fund your next home, sometimes even allowing for an all-cash purchase.
3. Wages Are Rising
Wages are up about 4% annually, according to the Bureau of Labor Statistics. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:
“Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”
On a national level, that’s encouraging news – paychecks are rising faster than home prices, which should boost affordability. But here in San Diego, where housing costs remain significantly above the national average, the impact may feel less dramatic.
What This Means for You
Buyers, if you’ve been waiting for a more affordable moment to buy, this could be it. Lower rates, moderate price growth, and rising wages are creating an environment where owning a home is more achievable.
Sellers, while price growth has slowed, buyers are now more empowered to act. Your equity gives you flexibility, whether you’re upsizing, downsizing, or relocating.
If buying or selling is on your horizon, now is the time to explore your options and make a move that works for your goals.