San Diego at the End of September 2026: Rates Hit One-Year Highs, Inventory Is Still Growing, and What Comes Next

The San Diego housing market's story changed this month. Mortgage rates are sitting at one-year highs in the wake of the Federal Reserve's September 16 hike, while inventory has climbed to levels the county has not seen since 2019. If you are buying, selling, or investing, those two forces are reshaping the fall market in a very specific way, and I want to walk you through what the latest data actually shows.

After 18+ years as an agent, investor, and military spouse across San Diego County, I have learned that the market is always telling you something. Right now it is telling you that balance is returning: more homes to choose from, more room to negotiate, and more reason to rely on clear information instead of headlines. Let me show you where the numbers stand.

Rates Hit a One-Year High After the Fed's September Meeting

The Federal Reserve raised its benchmark rate by a quarter point to 3.75% to 4.00% on September 16, its first hike since 2023, citing inflation that is still running near 3.4% and above the Fed's 2% target. Chair Kevin Warsh signaled that at least one more increase could come before year's end, and futures markets are already pricing rates near 4.1% by December. I wrote a full breakdown of the decision and what it means locally the day after it happened; the summary is that borrowing costs moved up immediately.

What matters for your mortgage is how bond markets react, and they reacted fast. Freddie Mac's weekly survey put the average 30-year fixed rate at 6.95% for the week ending September 17, up from 6.76% the week before and 6.26% a year ago, with the 15-year fixed averaging 6.26%. Rates touched about 7.08% on the day of the hike, the highest reading in more than a year. The direction is unambiguous: borrowing is more expensive than it has been all year, and it is expected to stay that way through the fall.

San Diego Inventory Is the Biggest Story of the Fall

Here is the counterweight to the rate headlines: supply. Countywide active listings sit at roughly 6,400 as of the most recent published counts, with months of inventory near 3.2, the most available housing stock San Diego has seen since 2019. Even as rates rose, the number of homes for sale kept growing through late summer and early fall, and median listing prices have begun to ease. The St. Louis Fed's measure puts the county's median listing price at about $899,000 for August, down from $922,500 in July, and Zillow's average county home value is roughly $940,986, essentially flat year over year.

Days on market tell the same story. Redfin's most recent city-level data, published September 18, shows San Diego homes selling in a median of about 27 days with an average of three offers, while Zillow shows homes going pending in 16 to 17 days. However you measure it, buyers have more time, more choices, and more leverage than they did at the height of the market. That is a real shift, and it changes how every strategy should be built this fall.

What This Means for Buyers: More Choice, Less Panic

For buyers, this is the most balanced market we have had in years. Sellers are offering credits and concessions again as they compete for qualified buyers, and homes are staying on the market long enough to compare thoughtfully instead of bidding blind. The trade-off is financing: at roughly 7%, the payment on the county's median-priced home stretches budgets, so the buyers who win are the ones who are pre-approved, know their non-negotiables, and are ready to move when the right home appears. First-time buyers often find their entry through attached homes in neighborhoods like Mission Valley, North Park, Normal Heights, or Chula Vista, where prices sit below the county median and equity builds from day one. My Buying Guide walks through pre-approval, offer strategy, and negotiation built for exactly this market.

What This Means for Sellers: Price Honestly and Prepare

If you are selling this fall, the more balanced market is good news if you price and prepare correctly. The first two weeks of a listing still decide its trajectory, and homes that are priced honestly, staged well, and marketed professionally are still selling close to asking while overpriced listings sit and accrue stigma. Understand that today's buyers have options: they will ask for repairs, they will ask for credits, and they will compare. My article on pre-sale home repairs that actually pay off in 2026 covers what is worth doing before you list, and the full playbook, from pricing and staging to concessions and negotiation, lives on my Selling Guide.

What This Means for Investors: Negotiation Room Is Back

For investors, the combination of higher rates and rising inventory has cooled the rush to buy at any price, and that is an opening, not a warning. Sellers are more willing to negotiate today than at any point in the last several years, and serious investors are leaning into value-add properties in neighborhoods near bases, transit, and job hubs, where the gap between asking price and true after-repair value is widest. My commercial contracting background matters here: when I look at a property, I can price the renovation in hours rather than weeks, and I know exactly which upgrades the San Diego market rewards. If you are deciding whether to hold, sell, or buy an investment at these rates, I would love to run the numbers with you the way I run them for my own portfolio. The Investment Properties page explains how that analysis works.

Military Families Have a Quiet Advantage Right Now

One group should feel particularly good about this market: military families. VA loans continue to price well below the headline rates, with 30-year fixed VA purchase rates around 6.375% as of mid-September and some credit unions advertising even lower. That means zero down, no private mortgage insurance, and with inventory growing, time for a full VA appraisal without racing contingencies. If you are PCSing this fall to Camp Pendleton, Naval Base San Diego, or MCAS Miramar, the extra inventory is working in your favor. My Military and Veterans page covers the neighborhoods, the BAH math, and the timing from someone who has made these moves herself.

Where Are You Headed Next?

Here is my honest read of late September 2026. Rates are at a one-year high and may climb again, but inventory is doing something it has not done since 2019, and that changes the balance of power in a healthy way. Buyers have leverage. Sellers need preparation. Investors have negotiation room. The market is not frozen, it is simply requiring more skill, and that is exactly the kind of market where clear guidance pays for itself.

What is your biggest challenge? Where are you headed next? That is where every conversation I have starts, because the right decision for you depends on your situation, not on what the market is doing for your neighbor. Call or text me at (619) 630-9618, or visit the contact page and let us build a strategy for this specific market.