Published · By Jeff Brick, 2026 SDMLS President
What happened to mortgage rates this week?
Quick answer: The average 30-year fixed mortgage rate rose to 7.28% on October 1, 2026, up from 7.03% a week earlier and 6.34% a year ago, according to Freddie Mac. On the median-priced San Diego condo, that is roughly $335 more per month in principal and interest than a year ago. Prices are holding because houses are scarce, while condos offer real room to negotiate. Three dates this month will decide where rates go next: October 14, October 27 and October 28.
Freddie Mac weekly national average
30-year fixed mortgage rate
Freddie Mac’s weekly survey put the 30-year fixed at 7.28% and the 15-year fixed at 6.60%. The week before, the 30-year was 7.03%. A quarter-point move in seven days is a big one.
Freddie Mac’s chief economist, Sam Khater, still sees a housing market “supported by favorable economic conditions.” I agree with part of that. People have jobs and San Diego has demand. But a payment is a payment, and this one just got heavier.
Why are rates rising? The Fed, inflation and jobs
The Fed raised its rate in September
In mid-September the Federal Reserve raised its benchmark rate by a quarter point to a range of 3.75% to 4.00%, in a unanimous 12-0 vote. Chair Kevin Warsh was blunt, as quoted by Chase: “The plain fact is that inflation is too high, and has been for too long.”
Inflation is running above the Fed’s goal
The Bureau of Labor Statistics reported that consumer prices rose 0.4% in August and 3.4% over twelve months. Gasoline rose 3.9% in the month. Core inflation, which leaves out food and energy, was a calmer 2.4%, and shelter costs were up 3.0%. Lenders price mortgages off long-term bonds, and bond investors want more yield when inflation looks sticky.
12-month inflation (Aug 2026) vs. the Fed
Why the Fed raised rates
The job market just cooled
Here is the piece that could help. Friday’s jobs report showed employers added only 29,000 jobs in September, with unemployment at 4.2%. Soft hiring gives the Fed a reason to slow down. It does not guarantee lower mortgage rates, but it is the first data point in weeks that leans that way.
Three dates to watch
- October 14: the September inflation report.
- October 27 and 28: the next Fed meeting.
What does 7.28% cost on a San Diego home?
I ran the math on our local medians from the Greater San Diego Association of REALTORS® August report: $670,000 for attached homes and $1,120,000 for detached homes. These are my own calculations for principal and interest only, with 20% down on a 30-year fixed loan. They are an illustration, not a loan quote.
- Median condo or townhome ($670,000): about $3,667 a month at 7.28%, compared with $3,332 at last year’s 6.34%. That is $335 more each month, and about $90 more than one week ago.
- Median detached home ($1,120,000): about $6,131 a month at 7.28%, compared with $5,569 a year ago. That is $562 more each month.
P&I · $670,000 price · 20% down ($536,000 loan)
Monthly payment on the median San Diego condo
Illustration, not a quote.
San Diego prices are holding. Here is why.
Higher rates have slowed sales, not prices. The California Association of REALTORS® reported a San Diego County median of $1,090,000 in August, up 6.3% from a year ago, while county sales fell 8.4%. Statewide, the median was $901,420, up just 0.1%. C.A.R. economist Jordan Levine warned that a more restrictive Fed is “further challenging affordability.”
Redfin, which blends all property types, shows a county median sale price of $961,781, up 5.7%, with the typical home selling in 28 days and 35.4% of homes closing above list price. The medians differ because each source counts different homes, but they point the same direction.
The real story is that San Diego is two markets right now, according to SDAR’s August numbers:
- Detached homes: inventory down 20.7% to 2,883 homes, just 2.3 months of supply, median price up 4.7%.
- Condos and townhomes: inventory up 4.6% to 2,767 homes, 4.0 months of supply, median price up 0.1%.
San Diego County · August 2026
Two different markets
What this means for buyers
You cannot control the rate, but you can control the terms. Detached homes sold for 98.0% of their original list price in August and condos for 97.2%, per SDAR. Redfin shows 22.3% of county listings with a price reduction. Ask for seller credits toward a rate buydown or closing costs, especially on a condo that has been sitting past the 44-day average.
First-time buyers: this week’s focus
If this is your first home, the condo and townhome market is where the leverage is. Supply is 4.0 months, new listings are up 7.5% and prices are flat. A few practical moves:
- Shop the payment, not the price. A seller-paid buydown can matter more than a small price cut. Have your lender show you both.
- Get fully underwritten before you tour. When rates move a quarter point in a week, a stale pre-approval can cost you a home.
- Read the HOA documents early. Dues, reserves and insurance affect your monthly cost as much as the rate does.
- Ask about assistance programs. State and local programs change often, so I connect buyers with lenders who track what is funded right now.
What this means for sellers
If you own a detached home, you are selling into 2.3 months of supply with 20.7% fewer competitors than last year. Well-priced houses are still moving in about 35 days. If you own a condo, price to the current payment math and expect buyers to ask for credits. In both cases, the first two weeks on the market matter most, so preparation and pricing have to be right on day one.
What this means for investors
At 7.28%, most San Diego purchases will not pencil on leverage alone. The opportunities I see are in attached product, where sellers are negotiating, and in properties where you can add value or a unit. Run your numbers at today’s rate and treat any future refinance as a bonus, not the plan. Shelter inflation at 3.0% is a reminder that rent growth is moderate, so underwrite conservatively.
Jeff’s take
I have sold real estate here since 1999, through rates far higher and far lower than this. What I tell clients is simple: San Diego’s shortage of houses is a bigger force than any single Fed meeting. Waiting for a perfect rate has cost more buyers than it has saved, yet stretching past a comfortable payment is never the answer either. The smart move this month is to know your number, negotiate hard where supply allows it, and watch October 14 and October 28 closely. As 2026 President of the San Diego MLS, I look at this data every day, and I am happy to walk you through what it means for your street.
Let’s talk about your plan
Whether you are buying your first condo, selling a family home or adding a rental, you deserve Million Dollar Service at All Price Points. Call or text me at 858-324-4448 or visit JeffBrick.com for a payment and pricing review built on this week’s numbers.
Jeff Brick, REALTOR® | Compass | DRE# 02156850 | 2026 President, San Diego Multiple Listing Service | 2024–2026 Board of Directors, San Diego Association of REALTORS®
Frequently asked questions
What is the mortgage rate in San Diego right now?
Freddie Mac’s national average for a 30-year fixed loan was 7.28% on October 1, 2026. Your own rate depends on credit, down payment and loan type, so ask a local lender for a same-day quote.
Will mortgage rates go down in October 2026?
Nobody knows. September’s weak jobs report of 29,000 new jobs could ease pressure, but inflation is 3.4% and the Fed meets again on October 27 and 28.
Are San Diego home prices dropping because of higher rates?
Not so far. C.A.R. reported the county median up 6.3% in August to $1,090,000. Sales have slowed, and condo prices are flat.
Is it a good time for a first-time buyer in San Diego?
It can be if the payment fits your budget. Condos and townhomes have 4.0 months of supply, which gives buyers room to ask for credits and rate buydowns.
How much does a quarter-point rate change cost?
On a $536,000 loan, the move from 7.03% to 7.28% adds about $90 a month in principal and interest.
Payment examples are illustrations for principal and interest only and are not a loan offer. Market data is from the sources linked above and is deemed reliable but not guaranteed. Please consult a licensed lender and tax advisor for your situation.
