FEBRUARY 2026 NEWSLETTER

Affordability Trends (February 2026 Outlook)

Housing affordability is expected to remain a major challenge in San Diego as we move into February 2026, even with a calmer and more balanced market. While buyer urgency has cooled, affordability pressures continue to limit who can realistically enter the market.

San Diego home values are projected to remain flat to slightly lower year-over-year, with modest softening compared to early 2025. However, prices are still expected to sit well above long-term affordability thresholds, keeping many buyers stretched financially.

Affordability challenges go beyond pricing alone. Mortgage rates, property insurance costs, and ongoing supply constraints are likely to continue pressuring monthly payments. Even with small improvements in interest rates, income growth has not fully caught up, leaving many would-be buyers cautious or sidelined.

Across California, affordability is forecasted to remain historically low, though gradual improvement is expected later in 2026 as rates ease and inventory slowly increases.

Key Market Data Predictions (February 2026)

• Median home prices in San Diego: Expected to be mostly stable with slight year-over-year softness, but still at elevated levels.

• Inventory: Modest increase from winter lows, though supply remains limited compared to buyer demand.

• Mortgage rates: Trending slightly lower than mid-2025 highs, but still above long-term historical averages.

• Buyer demand: Cautious and selective, with many buyers watching rates and pricing closely before making moves.

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