Insights
Market reports, forecast data, industry insights, and more from iEmergent.
San Diego’s population may be holding steady, but the mortgage market is anything but static. Despite minimal household growth, total loan volume is rising—fueled by high home prices, a growing Hispanic population, and one of the country’s most active VA lending segments. For lenders, San Diego presents a complex mix of high costs and opportunities.
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The San Diego-Chula Vista-Carlsbad, CA MSA (hereafter referred to as the San Diego market) is California’s second-most populous and one of the most diverse in the nation. Of its 3.3 million residents across 1.15 million households, 56.9% identify as Black, Indigenous, or People of Color (BIPOC)—with Hispanic individuals comprising over a third of the total population.
Among San Diego’s 737 census tracts, 384 (52.1%) are majority minority census tracts (MMCTs), putting the metro on par with major metros like Atlanta and Washington, DC, but ahead of Phoenix (36.1%) and Seattle (31.3%).
The overall market homeownership rate is 54.2%, but for Hispanic households, that number drops to just over 41%, and for Black households, it falls further to 30%. While the Asian population in the market is also significant—about 12%—the homeownership gap for Hispanic residents is a defining trend to watch.
While national mortgage trends offer a high-level view of the industry, no two markets are alike. The U.S. comprises 84,414 census tracts, 925 Core Based Statistical Areas (CBSAs), and 393 Metropolitan Statistical Areas (MSAs)—and every one is unique. That’s why iEmergent forecasts mortgage opportunities at the census tract level, enabling lenders to build targeted, localized strategies.
Since 2010, iEmergent’s forecast model has maintained an accuracy rate of more than 90%, outperforming most models designed to predict U.S. mortgage originations. It’s backed by a money-back accuracy guarantee.
In San Diego, total purchase loan volume is forecast to grow by $4.58 billion between 2023 and 2026—a 30.9% increase. However, loan counts will increase by only about 3,200 during that time, signaling that growth is driven by higher home prices and larger average loan amounts rather than new households entering the market.
San Diego’s Mortgage Velocity Index (MVI) currently stands at 2.11, meaning loan growth is more than double the national rate—even with flat population growth. That’s a signal of high market momentum, albeit driven by affordability pressure.
In 2025, purchase activity in San Diego is expected to top 21,500 loans, with an average loan size of over $808,000. That adds up to more than $17 billion in forecasted purchase volume—emphasizing the outsized impact of home prices on market growth.
Our 2025 forecast pinpoints the neighborhoods where mortgage demand is strongest, down to the census tract. Areas shaded in red and orange reveal pockets of elevated purchase activity, especially in communities running along the southern border and into central parts of the metro.
The average home price in San Diego is approaching $1 million, and buyers must earn nearly $275,000 annually to comfortably afford a home—far above the local median income of $100,000.
The takeaway? Purchase volume is rising, but affordability is shrinking. This imbalance challenges lenders to develop creative solutions that make homeownership more accessible to a broader range of borrowers.
With Hispanic residents making up more than one-third of the market—and their population continuing to grow—this borrower segment represents one of the strongest opportunities for lenders. However, the Hispanic homeownership rate lags behind the overall rate by 13 percentage points.
Forecast data for 2025 shows that purchase loans to Hispanic borrowers are concentrated in the market’s southwest corner near the U.S.–Mexico border at Tijuana. That area is a bustling commerce center with many jobs and much lower average loan sizes than San Diego proper.
These insights strongly support targeted lending efforts. By implementing people-and place-based Special Purpose Credit Programs (SPCPs), lenders can more effectively reach Hispanic borrowers and help close the ownership gap.
San Diego is a military town—home to several Navy, Marine, and Coast Guard bases. That’s reflected in the data: VA loans make up 15% of all purchase volume in the market, totaling $3.1 billion in 2025. That’s significantly higher than many major metros:
VA lending is concentrated near military installations and the southern border, where veterans and active-duty service members live and work. For lenders, San Diego offers an opportunity to serve this segment with personalized outreach and borrower education—especially for those navigating VA loan benefits.
As interest rates improve, refinance activity in San Diego is forecast to nearly triple from 2023 to 2026. Minority borrowers are expected to maintain their share of this growth, with around 25% of all refinance dollars going to BIPOC borrowers.
For lenders focused on impact, SPCPs tailored to Hispanic or military borrowers may offer more meaningful returns than income-based programs alone.
San Diego’s housing market is a complex mix of high costs, low inventory, and strong demographic trends. It’s not a boomtown but a market where data can unlock opportunity.
With tools like iEmergent’s Mortgage MarketSmart, lenders can:
For lenders seeking growth and impact, the San Diego market offers a compelling case for data-driven action. The opportunity is there—you just have to know where to look.