San Diego Homebuyers Sacrificing Square Footage for Affordability

San Diego buyers crunched for affordability by record high home prices and decades-high mortgage rates are being forced to sacrifice square footage when making home purchasing decisions. At today’s 6.7% mortgage rates, a San Diego homebuyer with a $3,000 monthly budget can afford a 931-square-foot home, a sharp decrease from the 1,366-square-foot home the same buyer could have purchased with a 3% rate just one year ago, Redfin reports.

San Diego’s 435-square-foot difference is the largest out of the 50 most populous U.S. metros, but a worsening affordability crisis is forcing buyers to downsize everywhere, especially as home-sale prices remain at historic highs even as mortgage rates surge to a 15-year high.

“Soaring mortgage rates are throwing a wrench into prospective buyers’ plans,” said Redfin Senior Economist Sheharyar Bokhari. “Many would-be buyers are dropping out of the market because they can no longer afford the home they want, resulting in a dramatic dip in home sales. For buyers who need a home right now–and can still afford it–compromise is the name of the game. Some buyers will choose to sacrifice on location or move further away from the city center so they can get the space they want, while others will settle on a smaller home in their ideal location.”

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