What the Federal Reserve’s Decision Means for Buyers and Sellers
On July 30, 2025, the Federal Reserve chose to hold its benchmark interest rate steady at a range of 4.25% to 4.50%. Despite calls for immediate rate cuts due to slowing economic growth, the Fed emphasized a cautious approach, preferring to wait for more economic data before making any changes. This decision directly affects the real estate market—especially in high-cost areas like San Diego.
At Lending Bee, we help clients navigate complex shifts like this one with personalized mortgage solutions. Whether you’re buying, refinancing, or investing, our team ensures you understand how interest rates impact your real estate decisions and how to act strategically in response.
What Holding Rates Steady Means for Mortgage Borrowers
Mortgage Rates Remain Elevated
Even though the Fed doesn’t directly control mortgage rates, its policies heavily influence them. Since July’s announcement, the average 30-year fixed mortgage rate has hovered around 6.75%, with no immediate sign of relief. These elevated rates are closely tied to 10-year Treasury yields, which reflect investor expectations about future inflation and Fed policy.
Because of this, many potential homebuyers in San Diego face higher monthly payments, which can significantly affect affordability. For example, on a $900,000 home, a 6.75% mortgage rate leads to a monthly principal and interest payment of nearly $5,850—well above what many families can afford without stretching their budget.
Adjustable-Rate Mortgages and Refinancing
For homeowners with adjustable-rate mortgages (ARMs), the Fed’s decision may feel even more immediate. Without a rate cut, ARM holders could face increases in their monthly payments when their rates reset. While some homeowners may look into refinancing, the current rates offer little incentive. Roughly two-thirds of U.S. homeowners locked in rates under 4% during the pandemic-era lows, making refinancing at today’s levels unattractive.
Lending Bee offers a wide range of loan options to help buyers and current homeowners evaluate their choices. Our experts assess whether refinancing, switching to an ARM, or waiting for better conditions makes the most financial sense.
San Diego’s Unique Real Estate Landscape
High Prices and Low Inventory
San Diego continues to experience high demand and limited housing supply. With the median home price sitting near $910,000, many first-time buyers are priced out of the market. Adding to this challenge, a large portion of existing homeowners are unwilling to sell because they have locked in historically low mortgage rates. This “golden handcuff” situation keeps inventory low, further tightening the market.
Data shows that in 2023, nearly 60% of listings in San Diego were priced over $1 million. Builders struggle to keep up due to high labor costs, zoning restrictions, and delays in permitting. Without an increase in housing supply, even lower interest rates may not lead to improved affordability.
Why San Diego Buyers Still Show Interest
Despite high mortgage rates, demand in San Diego remains relatively strong. The city benefits from a diversified economy, excellent climate, and a coastal lifestyle that attracts remote workers and professionals. People want to live here, and they are willing to wait or pay a premium to do so. However, rising borrowing costs have slowed transaction volumes, with buyers taking longer to commit or adjusting their price expectations.
Lending Bee helps San Diego homebuyers assess when and how to act in a high-rate environment. We provide rate lock options and pre-approval strategies that give our clients a competitive edge—even when interest rates are less than ideal.
What This Means for Sellers, Buyers, and Investors
Buyers Must Focus on Affordability
Buyers in San Diego are feeling the impact of the Fed’s decision most directly. With higher rates pushing up monthly mortgage payments, many are reevaluating how much home they can afford. Some are opting to wait, hoping that the Fed will cut rates in the fall. Others are exploring less expensive neighborhoods or considering smaller properties.
If you’re a buyer, Lending Bee recommends focusing on the monthly payment, not just the interest rate. We guide clients through realistic budgeting, helping them find loan products that align with their financial goals.
Sellers Hold the Advantage—For Now
Sellers in San Diego benefit from low competition and steady home values. Many homes receive multiple offers, especially those in desirable neighborhoods or move-in-ready condition. However, the buyer pool is more cautious now. Homes that are overpriced or in need of renovation tend to linger on the market longer.
If you’re thinking of selling, now may be a smart time—especially if you’re not dependent on buying a new home with a higher-rate mortgage. Lending Bee works closely with sellers and their agents to ensure prequalified buyers are serious, prepared, and financially ready to close.
Investors Must Adjust Expectations
Real estate investors are also feeling the shift. Higher borrowing costs are compressing profit margins, especially for those relying on financing to acquire or renovate properties. Still, San Diego remains a long-term winner due to its strong rental market, population growth, and stable property appreciation.
If you’re an investor, Lending Bee offers specialized loan products including DSCR (Debt-Service Coverage Ratio) loans, bank statement programs, and rental property financing. These options help investors make smart decisions in a changing interest rate environment.
What Could Change if Rate Cuts Happen Later This Year
Future Rate Cuts Could Ease the Pressure
Market watchers are now focused on the Fed’s next moves. While no rate cuts occurred in July, there’s speculation that the Fed could cut rates in September or later in 2025, depending on inflation and employment data. If this happens, mortgage rates could decline modestly, offering relief to buyers and homeowners alike.
However, any drop in mortgage rates will likely be gradual. Mortgage rates are influenced by long-term bond yields, which respond more to economic expectations than Fed announcements alone. Buyers hoping for a sharp rate drop may need to adjust their expectations.
Demand Could Rise Quickly
If mortgage rates dip below 6%, expect buyer demand to pick up—especially among those who’ve been waiting on the sidelines. This could lead to more competition, higher offers, and reduced contingencies. While lower rates would improve monthly affordability, they may also push home prices higher again unless inventory expands.
Lending Bee keeps a close eye on rate trends, providing clients with timely insights, rate monitoring, and refinancing opportunities as the market evolves. We’re here to help you act quickly when conditions shift in your favor.
The Bottom Line for San Diego Homebuyers and Sellers
The Federal Reserve’s decision to keep rates steady sends a clear message: high borrowing costs are here to stay for now. For San Diego buyers, this means careful budgeting and strategic financing are more important than ever. For sellers, it’s a good time to leverage strong equity and low competition. For investors, it’s about patience, planning, and maximizing cash flow.
At Lending Bee, we specialize in helping clients adapt to real-time market conditions. Whether you’re buying your first home, refinancing an existing mortgage, or planning a new investment, we offer the tools and support you need to make confident, informed decisions in today’s changing market.