San Diego County’s median home price was up in May for the third month in a row.

The median price rose 0.9 percent to $812,250, said CoreLogic data. Despite the recent price bump, the median price is still down 3.3 percent annually after nine months of declines brought on by rising interest rates.

While interest rates are still limiting affordability for many buyers, experts say, the few buyers left are forced to fight it out for a limited pool of homes for sale.

Roughly 62 percent of U.S. homeowners have a mortgage rate of 4 percent and lower, said a recent study. As of the last week in May, the average rate for a 30-year, fixed-rate mortgage was 6.57 percent, said Freddie Mac.

“You have simply locked out a lot of people who aren’t willing to walk away from that rate,” said Chris Thornberg, economist and founding partner of Los Angeles-based Beacon Economics.

Thornberg was able to refinance his Los Angeles home at a 2.75 percent interest rate, which means, he said, he is never moving. He said it’s the same thing with most homeowners right now.

Thornberg said the same thing happened in the late 1970s when inflation and interest rates shot up and the real estate market grew cold. The average interest rate hit 18.4 percent by 1981 but declined to the 11 percent range by the mid-1980s, and home buying and selling picked up again.

Thornberg reasons the actual interest rate is, in a sense, less important to everyone involved in a home sale: What matters is that they see it is declining. In the mid-1980s, the home market shot to life again as the rate was decreasing, even though it was nearly double today’s rates.

There were 2,887 homes for sale in San Diego County in May, down 28 percent from the same time last year. There were about double, roughly 6,000, homes for sale in August. The median days on market before a sale dropped to 11.7 in May, its lowest in a year.

San Diego County’s median — the point at which half the homes sold for more and half for less — combines resale and newly built single-family homes, condos and townhouses. Here’s how the different home types fared in May:

• Resale single-family: Median of $910,000 with 1,627 sales, up from $900,000 last month. Down from its peak of $950,000 in April 2022.
  
• Resale condo: Median of $660,000, with 881 sales, up from $655,000 last month. Down from its peak of $663,000 in May 2022.
  
• Newly built: Median of $724,250 with 149 sales, down from $798,000 last month. This figure combines single-family homes, townhouses and condos. It is down from the peak of $890,500 in August 2022.
  

Prices followed similar patterns across Southern California in May, with most areas seeing medians increase or stay the same. Data for San Bernardino County was not available because of reporting delays. Here’s a look at the median prices across Southern California in May:

Los Angeles County: Unchanged month-to-month with a median of $800,000; down 6.3 percent for the year.

Orange County: Monthly rise of 1.2 percent for a median of $1 million; down 4.8 percent for the year.

Riverside County: Monthly rise of 1.4 percent for a median of $556,500; down 3.6 percent for the year.

San Diego County: Monthly rise of 0.9 percent for a median of $812,250; down 3.3 percent for the year.

Ventura County: Monthly rise of 3.9 percent for a median of $804,500; up 1.2 percent for the year.

Source: SDuniontribune by Phillip Molnar