San Diego’s real estate market continues to thrive, but big changes are unfolding that may affect both buyers and sellers. Interest rates have dipped slightly, opening up opportunity for some. At the same time, new tariffs are officially in effect, raising concerns about inflation, construction costs, and housing affordability.

With these shifts already underway, it’s crucial to understand how they could influence your next move.

Interest Rates Have Dropped Slightly

Buyers are seeing a window of opportunity as rates pull back. This creates a more affordable monthly payment and can significantly boost purchasing power in a high-priced market like San Diego.

Why this matters:

• Even a small rate drop can lower your monthly mortgage payment by hundreds
• More buyers are re-entering the market, creating new competition
• Locking in a lower rate now can help you afford more house

Tariffs Are No Longer Just Talk

As of April 2025, the U.S. has implemented major tariffs that directly affect construction materials and other imports. President Donald Trump announced a 10 percent baseline tariff on all imports, with some countries facing even higher rates. Chinese goods, for example, are now subject to a 34 percent tariff, and the European Union faces a 20 percent rate.

What this means for housing:

• Construction costs are rising due to increased prices on lumber, steel, electrical parts, and more
• Builders may slow or pause new projects, leading to reduced supply
• Prices for resale homes may go up as buyers compete for limited inventory
• Fewer affordable housing options could squeeze first-time buyers and low- to mid-income families

Tariffs are not a future risk. They are already impacting the market today.

What This Means for San Diego Sellers

Sellers in San Diego still have a strong edge. With fewer homes being built and buyer competition heating up again, resale properties are gaining value and interest.

Why this may be the right time to list:

• Lower rates are motivating serious buyers
• New builds are slowing down due to higher material costs
• Homes priced correctly are receiving multiple offers
• You may be able to move up or downsize strategically before more market changes

Even if you’re just considering a move, now is the time to find out what your home is worth in today’s shifting market.

What Buyers Need to Consider

In a tightening market, waiting may not work in your favor. Tariffs could drive prices higher if new construction slows and inventory remains tight. If rates go back up, your purchasing power shrinks.

Buyers should keep in mind:

• Inventory may drop further as construction costs rise
• Lower rates now could be replaced with higher ones if inflation picks up
• Acting during a calmer market may give you an advantage before demand increases
• Long-term affordability could be more favorable if you lock in a loan today

Quick Recap

• Interest rates have dropped slightly, but how long that lasts is uncertain
• Tariffs have already been implemented, raising construction costs across the board
• Fewer new homes may increase competition for resale properties in San Diego
• Sellers still have the upper hand, especially in high-demand neighborhoods
• Buyers who act now may avoid future price hikes and higher interest rates

Let’s Make a Plan That Works for You

Whether you’re buying, selling, or just curious about your options, it’s more important than ever to understand what’s happening in the real estate market. Tariffs, interest rate shifts, and low supply all play a role in timing your next move.

Want a free home valuation or a strategy session to talk about your goals? Reach out today and let’s navigate this market together. Call Alexander at 619-339-7334.