Mortgage Rates Hit 7.40%. Should You Buy in Santa Clara County Now or Wait?
At 7.40% on a 30-year fixed, buying a $1.88 million home in Santa Clara County feels like a stretch. But waiting has real costs too, and the data tells a more complicated story than "just wait for rates to drop." If the payment works and you find the right place, sitting on the sidelines may cost you more than you think.
Should I wait for mortgage rates to drop before buying in San Jose?
That's the question I hear constantly right now, and honestly, there's no one-size answer. According to Freddie Mac's PMMS from October 8, 2026, the 30-year fixed sits at 7.40% and the 15-year fixed at 6.73%. A year ago the 30-year was 6.30%, so rates have moved in the wrong direction.
But here's the thing: rates are one piece of the puzzle, not the whole picture. The questions that actually matter are:
- Does the monthly payment fit your budget today?
- Do you have enough cash reserves after closing?
- Is your timeline flexible enough to wait out an uncertain rate environment?
If all three answers point toward buying, then waiting for a rate drop that may or may not come could mean competing for fewer homes at higher prices later. If any of those three are shaky, then patience is the smarter play.
What's happening in the Santa Clara County housing market right now?
The market is competitive, even with rates where they are. According to the MLSListings County Summary Report for September 2026, the Santa Clara County single-family median hit $1,880,000, with homes selling in just 12 median days on market. Buyers paid an average of 103% of list price, meaning most offers are still coming in above asking.
Inventory is up, which is genuinely good news for buyers. The same report counted 1,224 active listings, up 21% from September 2025, with 726 homes sold. More homes to choose from means slightly less frantic competition than we saw a couple of years ago, but "less frantic" is not the same as "easy."
Check out the full Santa Clara County market report for the latest numbers.
Is San Jose different from the rest of Santa Clara County?
A bit, yes, and in a good way for buyers. San Jose tends to come in below the county median, which makes it worth looking at if the broader Santa Clara numbers feel out of reach.
According to the SCCAOR quarterly report for Q3 2026, San Jose single-family homes had a median of $1,604,000, with an average of 27 days on market and sales at 102% of list price. Still competitive, but more breathing room than the county-wide picture.
For context, Los Gatos came in at $2,875,000 and Saratoga at $4,300,000 in the same report. San Jose is far from cheap, but it's a different category from those markets. You can see city-level detail on the San Jose market report page, or compare against the Los Gatos market report.
Could waiting actually save me money?
Maybe on price. According to the Aculist October 2026 update using September data, the Santa Clara County single-family median is down 3.6% year over year. Condos and townhomes are down even more, with a median of $850,000, off 10.5% year over year. So prices have softened some.
The tradeoff is that nobody knows where rates go from here. If you wait and rates drop to 6%, you might save on the monthly payment but pay more for the home as demand returns and prices climb. If rates stay flat or rise, you've waited for nothing and the inventory picture may look worse.
I never tell clients to buy because prices might go up. But I do walk through the actual numbers so they can make a clear-eyed decision. If you're a first-time buyer, this kind of math is especially important to run before you decide. The first-time home buyer page has more on how to think through the process.
Why are homes still selling fast if rates are this high?
Because there still aren't enough of them. According to rereport.com's September 2026 data, there were 993 active single-family homes in Santa Clara County on October 5, 2026. The long-run average since January 2000 is 2,703 homes. That means inventory is running at less than 37% of the historical norm.
High rates slow the market down, but they don't create supply. Sellers who locked in low rates years ago are staying put, so there are fewer homes coming to market than you'd see in a typical cycle. That structural shortage is a big reason why homes are still selling over asking even with rates at 7.40%.
This pattern plays out across the region. If you want to see how other nearby markets compare, the Santa Clara County overview is a good place to start.
Frequently Asked Questions
Are Santa Clara County prices falling?
They've softened a bit. The Santa Clara County single-family median was down 3.6% year over year, according to the Aculist October 2026 update using September data. Condos and townhomes fell more, with a median of $850,000, down 10.5% over the same period.
Are homes still selling over asking price?
Yes. Santa Clara County single-family homes sold at 103% of list price in September 2026, according to the MLSListings County Summary Report for that month. Competition has eased compared to peak years, but buyers are still routinely going above asking.
What is the current mortgage rate?
As of October 8, 2026, Freddie Mac's Primary Mortgage Market Survey reported the 30-year fixed rate at 7.40% and the 15-year fixed at 6.73%.
Is San Jose more affordable than other parts of Santa Clara County?
Relatively, yes. The SCCAOR quarterly report for Q3 2026 put San Jose's single-family median at $1,604,000, compared to $2,875,000 in Los Gatos and $4,300,000 in Saratoga. It's still a high-cost market, but meaningfully below some of the county's luxury submarkets.
How low is Santa Clara County inventory compared to normal?
Very low. According to rereport.com's September 2026 data, there were 993 active single-family listings on October 5, 2026, compared to a long-run average of 2,703 since January 2000. That's less than 37% of the historical norm, which helps explain why competition stays strong even with high rates.
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What's your home worth today?
Online numbers are a starting point. If you want the real answer for your home and your street, I'll put together a free, personalized home valuation for you, no pressure and no obligation. Get your free home valuation here, or call or text me at (650) 695-1919.
Sirrom Alizem
REALTOR® | eXp Realty Nor Cal Inc | DRE #02137532
(650) 695-1919 | sirrom@realtywithsirrom.com | www.realtywithsirrom.com
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