Everyone Is Waiting for Rates to Drop. Today's Rate Is Already Lower Than the Fifty-Five Year Average.

Probably not on rates alone. The 30-year fixed averaged 6.76% on September 10, 2026, below the roughly 7.7% average since Freddie Mac began tracking in 1971. Waiting for a rate under 4% means waiting for conditions that existed in about one decade out of the last fifty-five.

The usual advice here is to go ask someone who bought a few years ago whether it was worth it. That is decent advice and it has a hole in it, which I will get to. First, the part of the question that has an actual answer.

Is today's rate actually high?

Not by any long measure. Here is what the same $700,000 loan costs in principal and interest at four different points:

Three things fall out of that table:

• 2021 was the lowest calendar year on record in fifty-five years of data. The single lowest week ever recorded was 2.65% in January 2021.
• Today's rate sits roughly a point below the long-run average, not above it.
• The 2021 window was a policy response to a pandemic. It was not a normal market returning to itself.

Rates have been in the mid 6s for four straight years now. The 2026 average through early September was 6.37%, with a low of 6.01% in February. That is the band, and nothing currently suggests a return to the 2 percent range.

What did the people who bought ten years ago actually lock in?

Two separate things, and only one of them gets talked about:

• A price. San Diego values have risen substantially over the last decade, though published county medians currently range from roughly $842,000 in Oceanside to over $1,000,000 depending on the source and the geography measured. Treat any single median with suspicion.
• A payment. This is the one nobody mentions. A 2016 buyer's principal and interest has not moved once in ten years and will not move for the next twenty.

The price gain is the part people brag about. The frozen payment is the part that actually changed their life, because it compounds silently against every rent increase in the county.

Does a fixed payment really beat rising rent?

Eventually, yes, and California makes the math unusually favorable:

• Principal and interest on a fixed loan never change. Not with inflation, not with the market, not ever.
• Property taxes are limited by Proposition 13 to roughly 2% annual growth in assessed value, so the tax half of your payment is predictable for as long as you own.
• Rent has no such ceiling on its long-run trend. California caps annual increases on many older buildings, but a cap on the rate of increase is not a cap on where rent ends up.
• Insurance is the exception. That line is rising for everyone in California, owners included, and there is a separate post on the blog covering why.

Run it at $3,000 rent today against a fixed $4,544 in principal and interest. At 4% annual rent growth the two lines cross somewhere around year eleven, and every year after that the gap runs the other direction permanently. Owning costs more first and less later. That is the actual shape of it, and anyone telling first-time buyers it is cheaper on day one is not showing them the numbers.

What about the people who bought at the wrong time?

Here is the hole in the go-ask-a-homeowner advice. The people who bought at the San Diego peak in 2005 and 2006, watched values fall sharply, and lost the house in the years that followed are not standing in the room to be asked. Survey only the people still holding and you will hear that it always works out.

What separated the 2006 buyers who kept their homes from the ones who did not was not timing. It was two things:

• A fixed rate rather than an adjustable one that reset into a payment they could not carry.
• A payment that fit their income with room, so a bad year did not end the ownership.

Which means the honest version of the transcript's point is stronger, not weaker. Buying works when the loan is fixed and the payment is survivable. That is a condition you control today, and it has nothing to do with predicting the market.

What can equity actually do for you before you sell?

• It can be borrowed against while you keep living there, which is the option renters do not have at any price.
• For veterans and military buyers, a VA cash-out refinance is one route, with its own funding fee and seasoning requirements covered in a separate post on the blog.
• It can fund the move up to a larger home, which is a different calculation with its own hold period requirement.
• And it sits there doing nothing at all, which is also fine. Equity does not have to be used to be worth having.

Ask Your Lender This

Two questions, word for word:

• "What does my payment look like at today's rate, and what does it look like with two points bought down by a seller credit?"
• "If rates drop a point in two years, what would refinancing this loan actually cost me?"

The first tells you whether the payment you are waiting for is already available. The second tells you what you are really risking by locking something today, which is usually less than people assume.

If you have been saying next year for two or three years running, the thing to do is not read another article. It is run your actual numbers once. Reach out and we can put your real figures against your real rent, or call me at (619) 485-8293.

Frequently Asked Questions

Should I wait for mortgage rates to drop before buying?

Rates alone are a weak reason to wait. Today's 30-year fixed is below the fifty-five year average, and the sub-4% era was a pandemic policy response rather than a baseline. Wait for a specific change in your own situation, not for a number to come back.

Will rates go back to 3%?

Nobody knows, and anyone claiming otherwise is guessing. What the record shows is that rates spent most of the last five decades above where they are now, and below 4% for roughly one of those decades.

What if home values fall after I buy?

It happens, and San Diego has done it before. The protection is a fixed rate and a payment you can carry through a bad stretch, which lets you hold long enough for the question to stop mattering.

Does this apply to buyers on orders?

Partly. Veterans and military buyers moving into San Diego North County on PCS orders face a shorter likely hold period, which changes the calculation in ways covered separately on the blog. The rate history applies to everyone. The hold period is where the military version differs.

Is it cheaper to own than to rent right now?

No, not in month one, and it is not close. Owning here currently costs more per month than renting a comparable place. The advantage shows up over years as your payment holds still and rent does not.

Rate figures come from the Freddie Mac Primary Mortgage Market Survey. Price figures are drawn from multiple published sources that vary considerably, and no single median should be treated as definitive. Rent growth in the crossover example is an assumption, not a forecast. This content is for informational purposes only and is not legal, tax, or financial advice. Consult your lender and a qualified tax professional. All real estate services comply with NAR, HUD, and California DRE regulations.