San Diego was among more than half of U.S. cities with falling home prices in September.
The San Diego metropolitan area’s home price decreased 0.85% annually in September, said the recent S&P Cotality Case-Shiller Indices report. That puts the region at No. 15 in the 19-city index (Detroit was missing in this report because of local recording issues).
Nationwide, home prices were still up annually at 1.3%, but it was the slowest pace in more than two years. The index was lifted up by the Chicago metro area, up 5.45%, and New York, up 5.25%. The biggest drops were in Tampa, down 4.14% year-over-year, and Phoenix, down 2.02%.
“Price growth slowed even as mortgage rates fell in September,” said Lisa Sturtevant, chief economist at Bright MLS. “Affordability is the biggest constraint in the market right now.”
She said there is evidence of a K-shaped real estate market in most metro areas, with luxury housing selling well but the rest of the market in the dumps. A “K-shaped” economy refers to the gap between affluent consumers who are seeing their wealth increase — the upward-slanted stroke of a “K” — compared to low- and middle-income consumers who are struggling financially — the letter’s lower-slanted stroke.
“The growing divide in the housing market is troubling because it is leading to a wider wealth gap,” Sturtevant said. “As younger generations have a harder time getting into the housing market, their ability to accumulate wealth through homeownership is delayed.”
The Case-Shiller index tracks repeat sales of identical single-family houses — and is seasonally adjusted — as they turn over through the years. It is often seen as a bellwether of the economy as a whole. San Diego County’s median home price for single-family homes in September was $975,000, said Attom Data Solutions. The median is the point at which half the homes sold for more and half for less.
Mortgage rates were falling but seemingly not enough to affect prices or increase sales. The average for a 30-year, fixed-rate mortgage was 6.30% in the last week of September, according to Freddie Mac.
Anthony Smith, senior economist at Realtor.com, said the real estate market was losing steam under higher mortgage rates and affordability constraints.
“With borrowing costs still elevated and inventory rebuilding uneven across the country,” he said, “the housing market is settling into a period of slower, more fragmented price growth heading into year-end.”
San Diego County is on track to have one of its slowest home sales years in history, with 20,504 sales through September. The lowest year was 2023, with 25,317 home sales, according to records dating to 1988. It was narrowly followed by 25,920 home sales in 2024.
As of September, 29% of San Diego County homes were selling for above asking price, said Redfin, a big drop from a few years ago. In April 2022, 71% sold above asking price. The lowest, in records dating to 2012, was January 2015, when 14% sold above asking price.
Nicholas Godec, of the S&P Dow Jones Indices, said the market is the weakest since early 2023 when the Federal Reserve began hiking interest rates.
“With mortgage rates stubbornly elevated and affordability at multi-decade lows, the market appears to be settling into a new equilibrium of minimal price growth,” he said, “or, in some regions, outright decline.”
Annual price growth by metropolitan area
S&P/Case-Shiller Home Price Index, September 2025
Chicago: 5.45%New York: 5.25%Boston: 4.12%Cleveland: 4.02%Minneapolis: 2.37%Charlotte: 0.73%Washington, D.C.: 0.67%Los Angeles-Anaheim: 0.32%Atlanta: -0.15%Portland: -0.26%Seattle: -0.54%Denver: -0.65%Las Vegas: -0.69%San Francisco: -0.84%San Diego: -0.85%Miami: -1.26%Dallas: -1.33%Phoenix: -2.02%Tampa: -4.14%Detroit: No data