San Diego County’s median home price rose 5.3 percent in March — reversing nine months of declines — to $790,000, according to CoreLogic data. The region’s median, the point at which half the homes sold for more and half for less, is still down 1.3 percent annually.

Rising mortgage rates had softened the red-hot market in recent months. Yet real estate agents said competition over limited supply, and realization rates weren’t decreasing, pushed buyers to make a move.

The rise was felt across Southern California, with every county except Riverside seeing price increases. Sales were up in every county after record drops to start the year.

Local agents have observed a shift with buyers in recent weeks who are resigned to higher interest rates and willing to duke it out with other buyers for properties. The lack of homes for sale is a driver of rising prices.

There were around 2,915 San Diego County homes listed for sale in March, the lowest in 12 months. It was a better situation for buyers this summer when inventory reached nearly 6,000 homes for sale in August.

The lack of inventory was evident in sales numbers, which are still at historic lows. There were 2,541 home sales in March, down from 3,933 at the same time last year. That was the second-lowest sales for any March in records going back to 1988. The lowest was 2,108 in March 2008 during the Great Recession.

Steven Thomas, founder of real estate tracker Reports on Housing, said San Diego is one of the hottest markets in the West because of its lack of inventory. He said it doesn’t take a lot of sales to move the market.

“You have millennials, the first-time homebuyers, that is a strong demographic. They are getting married, having babies, and want to move into a house,” he said. “They are typically dual income and pulling the trigger. There doesn’t have to be many of them, because there are so few homes available that they are bidding against each other.”

Thomas said when interest rates first started going up, many buyers were shell-shocked at how quickly things were changing. Rates are somewhat stable now, staying around 6.15 percent to 6.7 percent.

The interest rate for a 30-year, fixed-rate mortgage was 6.32 percent in the last week of March, said Freddie Mac, up from 5.1 percent the year before. However, rates were climbing in April with an average of 6.59 percent for a 30-year mortgage Monday morning, said Mortgage News Daily.

Thomas said current homeowners probably have much lower interest rates on mortgages that they have been paying on for years, so it wouldn’t make a ton of sense to sell and buy something else. Despite prices increasing, inventory is still dropping throughout San Diego County, something Thomas said could continue to push up prices in the coming months.

Here’s how the different home types fared in March:

• Resale single-family: Median of $880,000 with 1,538 sales, up from $850,000 last month. Down from its peak of $950,000 in April 2022.
  
• Resale condo: Median of $650,000, with 813 sales, up from $625,000 last month. Down from its peak of $663,000 in May 2022.
  
• Newly built: Median of $801,000 with 151 sales, down from $777,000 last month. This figure combines single-family homes, townhouses and condos. It is down from the peak of $890,500 in August 2022.
  

The monthly payment on the combined median of $790,000, given interest rates at the time, would have been around $4,203 in March — assuming a 30-year, fixed-rate mortgage with 20 percent down. That’s up from $3,714 a month from the same time last year when the interest rate was around 5.1 percent.

Here’s a look at the median prices across Southern Californian markets for March:

Los Angeles County: Monthly rise of 4.4% to $799,000; down 4% for the year.

Orange County: Monthly rise of 3.6% to $990,000; down 2.5% for the year.

Riverside County: Monthly decrease of 0.8% to $535,750; down 4.9% for the year.

San Bernardino County: Monthly rise of 1.1% to $480,000; up 1.1% for the year.

San Diego County: Monthly rise of 5.3% to $790,000; down 1.3% for the year.

Ventura County: Monthly rise of 4.7% to $775,000; flat for the year

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Source: SDuniontribune by Phillip Molnar