San Mateo County Real Estate Market Update - Through December 2025 and early January 2026
Overview of 2025 Economic & Housing Dynamics
In 2025, Bay Area real estate markets began the year with strong buyer demand, but momentum was disrupted in early spring when political and economic uncertainty surged. By mid-summer, however, stock markets rebounded to hit new highs, and mortgage interest rates began a meaningful, sustained decline. These changing financial conditions triggered a shift in buyer and seller psychology, though consumer sentiment remained sharply divided between affluent and less affluent households, influencing various market segments differently.
Higher-priced, affluent markets-such as many San Mateo County cities-outperformed more affordable regions. Rising household wealth from stock market gains supported purchasing power among higher-income buyers, while less affluent segments were more affected by inflation, affordability barriers, and employment uncertainty.
Despite rapid economic fluctuations throughout the year, many of the county’s 2025 housing indicators ended up looking broadly similar to 2024. San Mateo County’s median house price hit a new high in 2025, while its condo median, like those in many counties, declined.
Mortgage Interest Rates: Declining Into Early 2026
According to Freddie Mac weekly readings, the average 30-year fixed rate on January 8, 2026, was:
6.16% - near a two-year low
Throughout 2025:
- Rates began the year above 7%.
- They trended downward through summer, briefly rising again before falling sharply by early fall.
- From late 2025 into early 2026, they hovered consistently in the low-6% range.
This drop significantly improves affordability relative to peak 2025 levels, though rates remain far above pre-2022 norms.
Economic Policy Uncertainty Index: Elevated but Far Below April Peak
The Economic Policy Uncertainty Index shows:
- A massive spike in April 2025 driven by the “tariff shock”
- A sharp decline afterward
- A slight uptick in November 2025
- December 2025 levels still elevated compared to long-term averages but dramatically lower than the April peak
For context, the index historically spiked during:
- Dot-com crash & 9/11
- Subprime crisis & Great Recession
- First months of the pandemic
This volatility mirrors shifts in consumer behavior and investor confidence.
House Price Trends – Quarter by Quarter (2015–Present)
San Mateo County’s median house sales price for Q4 2025 rose:
+4.3% year over year
This continues a long-term pattern:
- Prices commonly peak in Q2 each year
- The county reached major cyclical highs in 2021, 2022, and 2024
- 2023 showed a brief dip before rebounding
- 2025 prices remained near all-time highs, especially in spring and early summer
Seasonal fluctuations remain normal, but long-term appreciation stays firmly upward.
Annual New-Listing Volume: Up From 2024, Still Low by Historical Standards
San Mateo County’s total number of new listings in 2025:
Rose nearly 9% from 2024,
but remains well below long-term norms.
Historical context:
- 2005–2006: ~13,000 listings annually (highest levels)
- 2008–2011: significant decline during the foreclosure crisis
- 2012–2018: stabilized during the recovery and tech boom
- 2020–2021: pandemic market fluctuations
- 2022–2023: sharp drop as interest rates surged
- 2024: bottomed further
- 2025: meaningful recovery, but still historically constrained supply
Low listing volume-paired with strong demand-remains one of the defining drivers of local price resilience.
January 2026 Market Setup
Entering 2026:
- Interest rates are near multi-year lows
- Stock markets are at or near all-time highs
- Buyer demand typically re-ignites early in the year
- Sellers often re-enter the market more slowly than buyers
This dynamic-rising demand meeting limited inventory-often produces the most competitive months of the year, typically February through May.
In 2025, this surge was derailed by the spring “tariff shock,” but absent new disruptions, early 2026 is positioned for a stronger seasonal upswing.
Conclusion
The data from these charts paints a picture of a county that remains one of the Bay Area’s most resilient and supply-constrained markets. Despite economic turbulence throughout 2025, San Mateo County closed the year with:
- New highs in median house prices
- A return of buyer confidence as mortgage rates fell
- Historically low but slightly improving listing volumes
- Elevated but easing economic uncertainty
As 2026 begins, the combination of lowered interest rates, strong stock market performance, and seasonally increasing demand suggests that San Mateo County could experience a more energized and competitive spring compared to 2025. With supply still well below long-term norms, pricing pressure is likely to remain upward, particularly in the single-family home segment.
