Population Decline in San Diego — What’s Really Happening?
For the first time in years, San Diego is seeing more people leave than move in. Although the area continues to experience natural growth—births outnumbering deaths—outmigration has become a major factor. High housing costs, limited inventory, and remote work flexibility are pushing many families to seek more affordable markets.
This shift has a direct impact on the housing sector. Fewer residents means reduced demand for home purchases. That softens the urgency typically seen in competitive markets and leads to changes in how homes are priced, how long they stay on the market, and how lenders adjust their offerings.
Lending Bee helps clients navigate these conditions by offering personalized mortgage strategies designed for today’s slower, more stable housing landscape. We make it easier for borrowers to understand when to act and how to secure the best possible terms.
Cooling Demand — How Buyers Are Reacting
Less Migration, Less Pressure
The slowdown in population growth means fewer newcomers looking to buy homes. That reduces competition, giving local buyers more leverage. San Diego’s median home price remains high—hovering around $1 million for single-family properties—but the reduced number of bidders per home has started to moderate the pace of price increases.
Homes are staying on the market longer, and sellers are increasingly open to negotiations. In past years, buyers had to make quick, aggressive offers. Now, there’s time for inspections, thoughtful offers, and even seller concessions. Lending Bee encourages clients to take advantage of this moment—especially first-time homebuyers who previously felt priced out of the market.
Rental Demand Remains Strong
As buying becomes more challenging, many residents are opting to rent. San Diego continues to attract young professionals and recent graduates, but high prices often make homeownership unrealistic in the short term. This dynamic keeps the rental market competitive, even as the homebuying market cools.
However, fewer homebuyers mean fewer mortgage applications. Lending Bee is working with clients to explore creative solutions, including lower down payment options and flexible credit requirements, to help renters transition into ownership despite economic headwinds.
Mortgage Rates — The Impact of Local Demand
Mortgage Rates Stay Elevated
Nationwide mortgage rates remain above 6%, and San Diego is no exception. With economic uncertainty and inflation concerns lingering, the Federal Reserve has held back on aggressive rate cuts. In turn, lenders remain cautious. The average 30-year fixed rate in the area is still near 6.7%, which can significantly impact monthly payments.
Still, local conditions matter. With reduced demand in San Diego, lenders are slowly adjusting their expectations. Lending Bee works directly with lenders to negotiate lower fees and better rates for qualified buyers. Our relationships with multiple lenders help clients access options that may not be visible to the average borrower.
Local Supply-Demand Trends Influence Lending
Mortgage lenders evaluate markets not just based on national trends but also on regional conditions. As San Diego’s housing market shifts toward balance—neither strongly favoring buyers nor sellers—lenders become more flexible. With more inventory and slower sales, they may be more willing to offer incentives such as rate buydowns or reduced closing costs to keep their loan pipelines moving.
Lending Bee tracks these lender behaviors closely. We ensure our clients benefit from these shifts by matching them with mortgage programs that reflect real-time conditions in the San Diego market.
Housing Supply — Inventory Growth Changes the Game
Inventory in San Diego has increased significantly compared to the pandemic years. While still low by historical standards, there are more homes available today than there were a year ago. This gives buyers more choices and reduces the urgency that often leads to bidding wars.
New home construction is also slowly rising, although it remains limited by supply chain constraints and labor shortages. Still, the increased availability is helping ease some of the pressure on prices. Lending Bee encourages buyers to explore both new construction and existing homes, depending on their goals, budget, and timeline.
What This Means for Buyers and Mortgage Clients
More Negotiating Power
The combination of steady mortgage rates, growing inventory, and lower population growth gives buyers an edge they haven’t had in years. Buyers with solid credit, strong income, and a well-prepared offer can often negotiate for better terms.
Lending Bee helps clients position themselves as strong borrowers. We review income, credit, and long-term goals to recommend the most competitive loan programs. Whether it’s conventional, FHA, or VA loans, we help buyers get approved and funded faster—often with fewer upfront costs.
Lenders Respond to Market Shifts
Lenders rely on steady loan volume to stay profitable. When fewer people are buying homes, lenders become more aggressive in attracting borrowers. This can mean better terms for qualified buyers—especially those who work with brokers like Lending Bee that have access to wholesale mortgage rates and special loan programs.
Our clients benefit from faster turnaround times, fewer delays, and more flexibility. We guide every borrower through the lending process to ensure no opportunity is missed in a slower market.
Strategic Advice for Buyers and Sellers
For Buyers
Buyers in 2025 should act with strategy. Home prices remain high, but population shifts have created a more balanced market. With fewer buyers per property and slightly more inventory, the timing is better than in past years. Lending Bee recommends getting pre-approved early and locking in rates when favorable dips occur.
We also help clients analyze whether to buy now or wait based on their financial situation. Sometimes, locking in a rate now and refinancing later makes more sense than waiting for lower prices that may not come.
For Sellers
Sellers must adjust to the new market reality. Gone are the days of multiple offers over asking within 24 hours. Today, pricing your home accurately and making small improvements can make all the difference.
Lending Bee works with real estate agents to align financing strategies with market positioning. We help sellers understand what buyers want and how financing can support smoother, faster transactions.
Long-Term Outlook: Challenges and Opportunities
San Diego’s population decline does not spell doom for the housing market. The area continues to attract talent, retirees, and military families. Local industries—from biotech to tourism—remain strong. As affordability improves through increased supply or future rate cuts, demand will return.
Lending Bee sees this period as an opportunity. It’s a time for buyers to be smart and deliberate, and for sellers to stay competitive. We offer clarity in an uncertain market and help every client make decisions that support their long-term financial goals.
Why Lending Bee Is the Right Partner for San Diego Buyers
Lending Bee offers unmatched local expertise, access to competitive mortgage programs, and personalized service every step of the way. In a changing San Diego housing market, we help clients navigate complex conditions with ease. Whether you’re buying, selling, or refinancing, Lending Bee provides the tools and guidance to succeed.
Let us help you move forward—confidently, strategically, and affordably.