The Housing Market in August 2026: Temecula & Murrieta Update

Mortgage rates have been anything but calm this year. After a brief dip in spring, the Federal Reserve raised its benchmark rate by a quarter point in September, pushing the federal funds target to a range of 3.75% to 4.00% — a hawkish move that rattled the bond market and pushed mortgage rates back up.

As of this week, the 30-year fixed rate sits at roughly 7.03%, the 15-year fixed at about 6.50%, and the 5/1 ARM at around 6.94%, according to Zillow data. Freddie Mac's weekly survey — considered the industry benchmark — put the 30-year fixed at 6.95% as of September 17, up from 6.76% the week before, and well above the 6.26% average from a year earlier.

Looking ahead, forecasters don't expect much relief before year-end. Both the Mortgage Bankers Association and Fannie Mae expect the 30-year rate to hold in the 6.6%–6.8% range through the rest of 2026. For buyers, that means today's rate environment is likely close to what you'll be working with for the next several months...waiting for a dramatic drop isn't a realistic strategy right now.

What This Means If You're Buying or Selling

For buyers: Rates near 7% are frustrating, but they're also the reason inventory has loosened up and sellers are more willing to negotiate — especially on homes that have sat a while. With nearly half of Temecula sales now closing under list price, there's real room to ask for concessions rather than bidding wars.

For sellers: Pricing accuracy is doing more work than it has in years. Homes that hit the market at a realistic number are still moving in about three weeks; overpriced homes are the ones racking up days on market and eventual price cuts.

For everyone: Don't wait on rates to move meaningfully lower this year — plan around today's numbers, and build in flexibility on price and terms instead.