South San Jose and South County still moved despite 7% mortgage rates
Realtor.com reported that mortgage rates topped 7% in September 2026. That is the number everyone leads with. But the Real Estate Data Aggregator counted 665 homes sold across South San Jose and South County in the three months ending August 31, 2026. Demand did not disappear. It got more selective.
677 pending sales means more homes were under contract than had closed. That is not a market that stopped. It is one where buyers are still making decisions, just more carefully than before.
The ZIP codes are not one market
The region-wide numbers are a starting point. Below, each ZIP code tells its own story. Some moved fast and over asking. Others sat longer and sold below list. Pricing and prep matter more when buyers have choices.
| 95111 | 95119 | 95123 | 95138 | |
|---|---|---|---|---|
| Median sale price | $995,000 | $1,383,900 | $1,345,000 | $1,470,000 |
| Median days on market | 19 | 9 | 19 | 18 |
| Sale to list | 102.6% | 102.4% | 100.8% | 103.8% |
| Sold above list | 49.3% | 58.3% | 48.7% | 52.8% |
| Under contract in 2 weeks | 46.9% | 41.7% | 39.1% | 50% |
| 95135 | 95136 | 95037 | 95020 | |
|---|---|---|---|---|
| Median sale price | $837,000 | $1,205,000 | $1,360,000 | $1,100,000 |
| Median days on market | 39 | 29 | 25 | 27 |
| Sale to list | 98.1% | 100.5% | 100.4% | 100.5% |
| Sold above list | 22.2% | 37.2% | 43.6% | 38.1% |
| Under contract in 2 weeks | 18.6% | 27.7% | 30.5% | 35.3% |
Where homes moved quickly
ZIP 95119 had the shortest median time on market. The Real Estate Data Aggregator counted a median of 9 days there, 7 days shorter than the same period in 2025. More than half of homes sold above list price.
ZIP 95138 was close behind. The Real Estate Data Aggregator counted a median of 18 days, and the average sale came in at 103.8% of list price. That ratio was up 4 points from a year before. Half of all homes there went under contract within two weeks of listing, up 21.9 points year over year.
Where the market slowed
ZIP 95135 told a different story. The Real Estate Data Aggregator counted a median of 39 days on market, 16 days longer than the same period in 2025. The average sale came in at 98.1% of list price, meaning sellers gave up a little to close. Only 22.2% of homes sold above list, down 17.5 points year over year.
ZIP 95136 also took longer. Median days on market were 29, up 4 days from 2025. Inventory there rose 41.9% year over year, according to the Real Estate Data Aggregator. More supply and softer demand is a combination that puts pricing pressure on sellers.
Prices: mostly flat, a few outliers
Most ZIP codes saw median prices dip a little year over year. That is not a crash. It is prices settling after a rate-driven affordability squeeze. The Real Estate Data Aggregator shows 95135 down 23.3% and 95136 down 19.2%, both larger moves worth watching. ZIP 95139 went the other way, up 41.4%, but only 10 homes sold there, so that figure reflects the mix of homes that happened to close, not a trend.
The rate backdrop
Realtor.com reported mortgage rates topped 7% in September 2026. Nationally, Zillow data cited by CNBC showed pending home sales down 8.5% year over year in September. Fannie Mae, as reported by CNBC, forecast the 30-year fixed rate to stay around 7.5% through 2027.
That context matters. This market held up better than the national picture. But it is not immune. The ZIP codes with more supply and slower absorption are already showing what rate pressure looks like on the ground.
The Federal Housing Finance Agency reported U.S. house prices rose 2.6% from July 2025 to July 2026. Month over month, prices rose 0.3% in July, seasonally adjusted. Nationally, prices are still moving up, just slowly.
What this means if you own here
If your home is in 95119 or 95138, the numbers say buyers are still competing for well-priced homes. If you are in 95135 or 95136, the data says pricing matters more now than it did a year ago. Overpricing in a slower ZIP costs time, and time costs money when rates are above 7%.
One street can read very differently from the whole ZIP code. The ZIP code numbers are a starting point, not the answer for your specific home.
- 665 homes sold and 677 pending across South San Jose and South County in the three months ending August 31, 2026, even with rates above 7%.
- The market is split: some ZIP codes are moving fast and over asking, others are sitting longer and selling at or below list.
- Where your home lands depends on the ZIP, the price and the prep.
Your next step
(408) 421-9448Text me your address and I will send back how your home compares with what actually sold in your ZIP, including days on market and where prices landed. Takes a day, costs nothing.
Text me- Real Estate Data Aggregator numbers for ZIPs 95111, 95119, 95123, 95135, 95136, 95138, 95139, 95037, 95020 and 95046, the three months ending August 31, 2026, compared with the same months of 2025. Real Estate Data Aggregator last updated them on Oct 7, 2026.
- Realtor.com: September 2026 Rental Report: Median Asking Rent Declines at the Slowest Pace in 3 Years, Oct 15, 2026
- Realtor.com: September 2026 Monthly Housing Trends: Price Cuts Hit 4-Year Highs as Mortgage Rates Top 7%, Sep 30, 2026
- Federal Housing Finance Agency: FHFA House Price Index® Up 0.3 Percent in July; Up 2.6 Percent from Last Year | FHFA, Sep 29, 2026
- CNBC: Fannie Mae sharply raises mortgage rate forecast for 2027, Oct 14, 2026
- CNBC: Thousands of homeowners face adjustable-rate mortgage resets — and much higher payments, Oct 13, 2026