San Diego Housing Prices Down, Inventory Up – and What a Trump Fed Could Mean for Mortgage Rates

San Diego Real Estate Market Update – July 2025

Welcome back to my monthly market update! If you’ve been following along, you know I like to dig deeper than the headlines and share what’s really happening in the San Diego real estate market. And this month, we’ve got some major shifts to talk about—not just here locally, but also with what’s happening nationally that could have big ripple effects.

San Diego Market Snapshot

The numbers for June and early July are telling us one clear story: the market feels “flat,” but cracks are forming beneath the surface—especially in attached homes (condos and townhomes).

• Pendings Slowed Down Over the Holiday: New pending sales dropped sharply over the July 4th week (down nearly 17% week-over-week).
• Prices Are Easing: Detached homes are down about -0.92% year-over-year, while attached homes are down a steeper -4.42% year-over-year.
• Inventory Is Rising: Detached inventory is up 27% compared to last year, and attached is up 37%.
• Marketing Times Are Increasing: The average days on market for detached is now 33 (up 22% from last year) and 37 for attached (up 27%).

When you adjust for inflation (using the Fed’s Core PCE rate at 2.7%), the “real” price declines are even more striking: detached homes are effectively down -3.6% in real terms, and attached homes are down a whopping -7.1%. Buyers are quietly getting a better deal than they think.

What to Expect in the Coming Months

The outlook depends heavily on mortgage rates staying in the 6.5%–7.5% range. Assuming that holds, here’s what I expect:

• 3-Month Outlook (Sept 2025): Values continue to trend lower into fall.
• 6-Month Outlook (Dec 2025): Average marketing time will push 50 days, and values could be down 4–6% from the May 2025 peak.
• 12-Month Outlook (June 2026): Expect prices to be down 5–7% year-over-year if rates remain elevated.

Condos and townhomes (attached homes) will feel the pressure more than detached homes. If you’re buying or selling in the condo market, plan accordingly.

The Trump/Powell Factor: What If the Fed Changes Leadership?

Let’s talk about the elephant in the room—politics and the Fed. There’s been increasing speculation about what happens if Donald Trump wins and replaces Jerome Powell as Fed Chairman. Beyond dropping the overnight Fed funds rate, a new Trump-appointed Fed chair could pull a 2020/2021-style move: buying mortgage-backed securities again.

Remember when the Fed was buying $90 billion in mortgage-backed securities every month? That’s what artificially drove mortgage rates into the 2–3% range. Could it happen again under Trump? Absolutely.

But let’s be clear: long-term, that would be a terrible idea for the housing market. Pumping cheap money into the system might juice rates in the short term, which would make Trump look good politically, but it would also risk creating another bubble that could crash the market later. Since Trump has always focused on “today” rather than the long-term consequences, I wouldn’t rule it out.

What This Means for You

Whether you’re buying or selling, timing and strategy matter more than ever right now. Buyers are quietly regaining leverage, especially in the attached market, while sellers need to be smart with pricing and marketing to stand out.

Want to see what’s available right now?

• 🔍 Search All San Diego Homes & Condos for Sale
• 🏙️ Browse Downtown San Diego Condos for Sale
• 📅 Schedule a Meeting With Me and My Team

As always, I live and work here, so I’m keeping a very close eye on how these numbers translate into real-life buying and selling opportunities. If you have questions about how this impacts your plans—or if you’re ready to jump in while buyers have some leverage—reach out anytime.