After several years of high mortgage rates and cautious buyers, momentum is quietly building beneath the surface of the North County San Diego housing market. Sellers are starting to re-emerge. Buyers are re-engaging. And for the first time in what feels like ages, we’re seeing real movement again.

No, it’s not a full-blown surge — but it is a meaningful shift, and one that could help set the stage for a stronger market heading into 2026.

So, what’s driving this comeback? Here are three key trends that are slowly breathing new life into the North County San Diego real estate market right now.

1. Mortgage Rates Have Been Coming Down

Mortgage rates are always going to have their ups and downs – that's just how rates work. Especially with the general economic uncertainty right now, some volatility is to be expected. But, if you zoom out, it’s the larger trend that really matters most.

And overall, rates have been trending down for most of this year (see graph below):

And in just the last few months, we’ve seen the best rates of 2025. According to Sam Khater, Chief Economist at Freddie Mac:

“On a median-priced home, this could allow a homebuyer to save thousands annually compared to earlier this year, showing that affordability is slowly improving.”

Here's why that matters for you. This shift changes what you can actually afford. It means lower borrowing costs and more buying power. Take this as an example.

Data from Redfin shows a buyer with a $3,000 monthly budget can now afford roughly $25,000 more home than they could one year ago. That’s a big deal. And it’s just one of the reasons why activity is picking up.

2. More Homeowners Are Ready To Sell

For a while, many homeowners stayed put because they didn’t want to give up their low mortgage rate. That “lock-in effect” kept inventory tight. And while plenty of homeowners are still staying where they are today, the number of rate-locked homeowners is starting to ease as rates come down. Life changes are becoming a bigger part of what’s driving more people to move, and that’s opening up more inventory.

Data from Realtor.com shows just how much the number of homes for sale has grown. And the really interesting part is that the market is approaching levels that haven’t been seen for the past six years (see the blue on the graph below):

That return to more normal inventory levels is a really good thing. It gives buyers more options than they’ve had in years. And it’s helping to bring the market closer to balance.

3. More Buyers Are Re-Entering the Market

And it’s not just sellers making moves. With more options and slightly better affordability, buyers are getting back in the game, too. The Mortgage Bankers Association (MBA) reports purchase applications are up compared to last year, a clear signal that demand is building again (see graph below):

And experts think this momentum will continue. Economists from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR) all forecast moderate sales growth going into 2026.

Now, this recovery won’t happen overnight. It’s not a flood of activity. But it is the start of steady improvement going into 2026. And that's something a lot of people have been waiting for.

Bottom Line

After several slower-than-normal years, the North County San Diego housing market is finally beginning to turn a corner. Declining mortgage rates, an increase in quality listings, and renewed buyer activity all point to a market gaining real traction.

If you’re thinking about making a move in 2026, Shafran Realty Group is here to help you navigate what’s changing—and how to take advantage of the opportunities ahead. Let’s connect to talk about what’s happening locally and what it means for your goals.