How do higher mortgage rates affect home sellers in San Diego? Buyers are focused on monthly payments, and builders are using incentives to win them. San Diego sellers who price and position their homes for today's buyers can still compete.
Higher mortgage rates don't just affect buyers. They change what it takes to sell, too.
Buyers in San Diego County are watching affordability closely. Even a small rate increase can noticeably change a monthly payment, so buyers are looking for ways to make the numbers work. In some areas, new construction is giving them exactly that.
If you're planning to sell, you can absolutely compete. You just need to understand what builders are doing and what options you have.
Builders Are Competing on the Monthly Payment
Nationally, new-home sales are holding up better than resales. HousingWire Chief Economist Logan Mohtashami recently noted new-home sales hit an 8-month high and are running near 2019 levels. Existing-home sales, meanwhile, are running about 1 million sales short of 2019.
A big reason is incentives. According to Realtor.com, nearly 1 in 5 newly built homes (18.8%) advertise a buyer incentive up front.
The most common one is a reduced rate, offered on 13.8% of new-home listings. Often it's a mortgage rate buydown: the builder pays upfront costs so the buyer gets a lower rate and a lower monthly payment. Some builders are offering rates below 6%, which can save buyers hundreds of dollars a month.
For buyers, that's a big draw. For builders, it gets homes sold.
How San Diego Sellers Can Compete
A rate buydown isn't only for builders. Depending on the loan and the transaction, sellers can contribute toward a buyer's buydown too.
That doesn't mean you have to. A buydown is one tool. Depending on your home and your buyer, it may make more sense to:
Adjust the price
Contribute toward the buyer's closing costs
Make repairs before or during escrow
Highlight what a new build can't offer
That last one matters. Realtor.com Senior Economist Joel Berner points out that resale sellers face real competition from new homes, and should lean into the neighborhood amenities that newer, more outlying communities often can't match.
In San Diego County, that's often location: proximity to the coast, established neighborhoods, mature landscaping, canyon views, and being close to everything you already love about living here.
Price for Today's Buyer
Builders have been quicker to adjust prices to what buyers can actually afford. NAHB Chief Economist Robert Dietz put it simply: resale homeowners now have to go through the same pricing adjustments builders have been making since 2022.
You don't automatically need to cut your price or offer a big concession. But you do need to price and market your home for what buyers can pay today, not what sellers got a few years ago.
This is where my three pillars come in: location, condition, and price. You can't change your location, but you can control the condition of your home and how it's priced. Get those two right, and your home stands out.
Know Your Local Competition
All of this varies by location. New construction is a much bigger factor in some parts of San Diego County than others, and builder incentives aren't equally common everywhere. Before you list, it's worth knowing exactly what buyers in your price range can get elsewhere, including new builds.
Frequently Asked Questions
Can a seller pay for a buyer's mortgage rate buydown?
In many cases, yes. Depending on the loan type and the terms of the sale, sellers can contribute toward a buydown that lowers the buyer's rate and monthly payment.
Do I need to offer concessions to sell my home in San Diego?
Not necessarily. It depends on your home, your price range, and your competition. Sometimes the right price and strong presentation do more than a concession.
How do I compete with new construction?
Highlight what a new build can't offer, like location, an established neighborhood, and character. Then make sure your condition and price line up with what buyers can get elsewhere.
Let's Position Your Home to Sell
Higher rates are making buyers more cost-conscious, and builders are responding. If you're thinking about selling, let's look at what buyers can get from other homes in your area, including new construction, and make sure your home is positioned to compete. Call or text me for a free home evaluation.
Billie Bourgeois | REALTOR® Real Broker | San Diego County, CA DRE# 01703336
