San Diego is famous for its beaches, weather and lifestyle. But it’s also one of the toughest places to buy a home in the United States. With prices hovering close to the million-dollar mark, many buyers are asking: Is it better to rent or buy right now? And if you do want to buy, what kind of credit score or down payment will you need?
This guide breaks down everything: average home costs, whether prices are falling, renting vs. buying, and the credit requirements you’ll face in today’s market.
What’s the Average Cost of a House in San Diego?
San Diego home prices remain high even with recent cooling:
- Zillow reports the average home value in San Diego is about $998,000, with prices dipping 3–4% year-over-year (Zillow).
- For single-family homes, July 2025 numbers came in at $1.04 million, according to NBC San Diego (NBC San Diego).
👉 Takeaway: The average San Diego home costs between $935,000 and $1.04 million, depending on location and housing type.
How Much Does Property Usually Cost?
Breaking down different property types:
- Detached homes (single-family): around $1.1 million.
- Attached homes (condos/townhomes): around $650,000.
Despite cooling, supply remains limited. San Diego still has just 2–3 months of inventory, far below the 6 months needed for a balanced market. This tight inventory keeps prices from dropping sharply (San Diego Housing Market).
👉 Tip: Buyers looking for a lower entry price should explore condos or multi-family properties.
Are Home Prices Falling in San Diego?
Many buyers are waiting for a “crash,” but so far the city has only seen modest declines:
- Prices are down 2–6% compared to last year, depending on the data source.
- Some neighborhoods still see bidding wars due to low supply.
- Many sellers are pulling listings instead of slashing prices, with Axios reporting that 15% of San Diego listings were delisted recently (Axios).
👉 Conclusion: Prices aren’t crashing—they’re cooling. For buyers, this means slightly better negotiating power. For sellers, it’s still a competitive market if your home is priced correctly.
Is It Better to Buy or Rent in San Diego?
This is the big debate. Let’s compare:
Buying:
- Median home cost: about $950,000–$1,000,000.
- Monthly mortgage payment: around $5,500–$6,000 (assuming 20% down and current interest rates).
- Long-term equity growth is possible, but upfront costs are steep.
Renting:
- Less commitment and lower upfront costs, but no equity building.
👉 Decision: If you are planning to stay in San Diego for 7 years, then it is better to buy a house for a long period. If you are uncertain about your job, family plans or financial status, then it is a more secure option to rent.
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What is a good down payment for home?
Down payment varies depending on the type of loan:
- Traditional Loans: 20% are considered ideal to avoid PMI (private mortgage insurance).
- FHA loan: allow a minimum advance amount of up to 3.5%, which makes them attractive for buyers for the first time.
- VA loans (for veterans): often require 0% down.
On a $950,000 San Diego home, that means:
- 20% down = $190,000.
- 3.5% down = $33,250.
👉 Tip: More down payment reduces the monthly cost and helps you to stay forward in the bidding process.
What Credit Score Is Needed to Buy a House?
Credit scores impact both your approval and your interest rate:
- VA and USDA loans: flexible with lower score requirements.
- Best terms: scores of 700+ qualify you for better rates.
👉 Bottom line: Aim for at least 620, but shoot for 700+ if you want lower payments.
Will San Diego See a Housing Crash in 2026?
This is the million-dollar question. Experts currently see slow cooling, not a crash:
- Inventory remains very low.
- California continues to attract buyers, investors, and retirees.
- There aren't enough homes being built to meet demand.
If interest rates stay high, there could be small drops in 2026, but a full-blown crash is unlikely without a big drop in the economy.
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Summary
San Diego’s housing market in 2025 is expensive but stabilizing. Here are the key takeaways:
- Average home price: $935,000–$1.04M.
- Condos/townhomes: around $650,000.
- Renting vs. buying: Renting is cheaper on a monthly basis, but buying makes long -term equity.
- Down payment: Aim for 20%, but FHA/VA options allow less.
- Credit score: Minimum 620; 700+ for best rates.
- Future outlook: Cooling, not crashing, into 2026.
If you’re considering buying or selling in San Diego, it pays to stay informed—and to work with professionals who can guide you through the market.
