Is 2026 Finally the Year San Diego Buyers Get Some Breathing Room?

If you have been watching the San Diego County real estate market over the past year, you know how intense 2025 has been. Limited inventory, rising prices in some pockets, softening in others, and historically low affordability have created a market that often feels unpredictable. As we close out the year, one trend is becoming clear:

Mortgage rates are stabilizing, and that shift is reshaping 2026.

For buyers in San Diego County, North County, and communities like Fallbrook, this change could finally create opportunities that late 2025 did not offer. Below is a breakdown of what is changing, what is coming in 2026, and whether waiting could be the smarter move for you.

Why Rates Matter More Than Anything Else Right Now

Affordability hit a breaking point in late 2025, with only 15 percent of residents able to purchase the median priced home
(Source: Voice of San Diego, 2025-12-05). This pressure was not just about high prices. It was heavily driven by interest rates.

The good news is that conditions are improving.

Forecasts show mortgage rates trending downward and stabilizing near 6 percent in 2026, which is a significant shift from the highs seen earlier in the cycle. As rates soften, more buyers qualify for financing and more sellers feel confident listing their homes.

This rate movement is the foundation of why analysts expect next year’s market to look very different from late 2025.

What the Data Says About 2026 Buyer Conditions

Multiple regional and national sources agree that 2026 is projected to be a more active and more balanced year for buyers.

Here are the most important signals:

✔ 1. Rates trending lower means more buying power

Q4 2025 reports confirm that interest rates are easing, giving buyers more leverage heading into the new year.
(“Prices Up, Days on Market Up, Interest Rates Down,” YouTube, 2025-12-01)

✔ 2. Sales volume is expected to rise

Economists predict a 4.3 percent increase in existing home sales as rates level out and more homes come onto the market.
(Zillow 2026 Forecast, Fox 5 San Diego, 2025-12-04)

✔ 3. Home prices are expected to grow modestly

San Diego County is projected to see approximately 1 percent price growth in 2026, which is far calmer than the rapid appreciation of prior years.
(2026 Housing Market Forecast, 2025-12-04)

✔ 4. Inventory is likely to increase into spring 2026

While inventory is still tight at the end of 2025, especially after the Thanksgiving slowdown, data suggests more sellers will list as rates stabilize and confidence returns.

Together, these signals suggest that early to mid 2026 may offer more opportunities than the final weeks of 2025.

Should You Wait or Buy Now? A Practical Breakdown

Waiting can be a smart move, but only if your goals and timeline fit the market. Below is a clear comparison.

If you want more options, 2026 is likely better

Late 2025 inventory in San Diego County dipped, which is typical for the season but difficult for buyers who want variety.
(Video Report: San Diego Market Watch, 2025-12-04)

As mortgage rates level out, buyers can expect:

• More listings between February and June

• More move-up sellers entering the market again

• Less competition for mid range homes

This pattern is even stronger in North County inland areas, which usually see movement before coastal neighborhoods.

If you want maximum affordability, waiting may help

Although prices may not decline, falling mortgage rates improve payment affordability. Even a half percentage point drop can change:

• Monthly payment

• Debt to income ratio

• Total purchasing power

If your focus is lowering your monthly payment, early 2026 may offer an advantage.

If you want the strongest negotiation leverage, late 2025 may actually be better

Even though 2026 is shaping up to be more buyer friendly overall, remember that:

• Buyer activity typically climbs in Q1 and Q2

• More inventory attracts more competition

• Prices often stabilize as the market warms up

Right now in late 2025, sellers in some segments are more flexible due to seasonal slowdowns, rising days on market, and price adjustments, especially in inland areas like Fallbrook.

If you want seller concessions or reduced pressure, acting before the end of the year could work in your favor.

Fallbrook and North County: What You Need to Know

Although San Diego County sets the larger trend, inland communities such as Fallbrook and several North County areas behave differently.

Current Fallbrook conditions heading into 2026

• Q4 home values dipped slightly, which improves buyer opportunity

• Days on market increased, giving buyers more negotiation room

• Migration trends favor rural and semi rural areas as rates decline

Buyers are increasingly shifting inland for more space, lower cost per square foot, and overall value, which means Fallbrook may heat up faster in early 2026 compared to higher priced coastal neighborhoods.

If you are targeting Fallbrook specifically, buying now could offer leverage, while waiting may offer more selection.

San Diego County vs. Fallbrook Buying Timing: Quick Comparison

Bottom Line for San Diego County Buyers

Here is the simplified takeaway:

Late 2025 is better if you want negotiation power and reduced competition.

Seasonal slowing creates opportunities for motivated buyers.

Early to mid 2026 is better if you want more selection and improved affordability.

Rates, inventory growth, and modest pricing make the market more accessible.

Fallbrook and North County may offer some of the best opportunities of all.

These areas balance affordability with demand and are well positioned for buyer activity in 2026.

Your best timing depends on your financial goals and lifestyle needs, but for many buyers, 2026 offers more advantages than the final weeks of 2025.

FAQs About Buying in 2026

Q1: Will San Diego County home prices drop in 2026?

A widespread decline is unlikely. Current forecasts project modest growth of about 1 percent. Improved affordability will come more from declining interest rates than from falling prices.

Q2: Will more inventory hit the market in 2026?

Yes. As rates stabilize, more homeowners are expected to list, creating more choices and reducing bidding pressure.

Q3: Is Fallbrook a strong place to buy in 2026?

Yes. Fallbrook’s affordability advantage, larger lots, and increasing migration trends make it a compelling option for buyers seeking value compared to coastal San Diego neighborhoods.

Thinking About Buying in 2026? Let’s Build Your Plan

Whether you want to move before the year ends or take advantage of improving conditions in 2026, the smartest approach is a personalized strategy based on your timing, lifestyle, and financial goals.

EPIC Realty Group, powered by lpt, specializes in helping buyers navigate San Diego County, North County, and Fallbrook with accuracy and confidence.

If you are considering a move in 2026, this is the perfect moment to prepare.

📩 Contact EPIC Realty Group, powered by lpt, to start your tailored 2026 home buying plan.