After years of steep price increases that made homeownership extremely hard for many in the San Diego region, the latest housing data shows some modest improvement in affordability — but only barely.

In late 2025, San Diego home prices rose very slowly compared with previous years, according to the widely followed S&P CoreLogic Case-Shiller Home Price Index. The region recorded just a 0.79% year-over-year increase in December 2025, the slowest annual growth in more than a decade.

That marks a clear slowdown from the double-digit annual gains the market often saw during the pandemic-era boom. In contrast, early 2024 saw annual price growth above 10%, highlighting how sharply the pace of increases has eased.

Economists and housing analysts say this slowdown has given buyers some relief after years of worsening affordability, driven by San Diego’s high housing costs relative to incomes. As one market economist put it, “After years of worsening affordability, we’re seeing meaningful relief for homebuyers.”

Prices Still High Relative to Incomes
Despite the slower pace of growth, home prices in San Diego remain very high compared with local incomes. The median single-family home price in the region was around $986,800 in late 2025, according to Case-Shiller data.

Yet typical household income in San Diego County is far lower. Based on Zillow’s analysis, a household with median earnings can generally afford a home priced around $477,000, meaning only a small share of homes currently on the market are within reach of average buyers.

That affordability gap — with median prices roughly twice what median-income households can reasonably afford — underlies much of the ongoing challenge in the region.

Why Price Growth Has Slowed
Several factors are helping keep price increases muted:

• High mortgage rates — Even though rates are slightly lower than their peaks, they remain elevated compared with the ultra-low pandemic era. Higher borrowing costs reduce the number of buyers who can qualify for loans.
• Greater inventory — More homes have come on the market compared with the extremely tight supply seen earlier in the decade, giving buyers more options and slowing bidding-war dynamics.
• Discounts and concessions — A significant share of recent sales in San Diego sold for below the original asking price, reflecting softer buyer demand and giving home shoppers additional leverage.

Together, these trends have helped dampen the pace of price growth — even if prices themselves remain elevated.