San Marcos: How Mortgage Rates Shape Buying Power in October

What does a 7.4% mortgage rate mean for a buyer in San Marcos today? With the median home price at $407,800 across 40 closed sales in September, the baseline principal and interest payment sits at $2,259 per month based on a loan amount of $326,240. This figure comes from ALEX Intelligence applying current market rates to the local median price. The cost of borrowing has shifted buyer behavior. While the median price rose 27.6% from August and 21.9% from last September, the number of closed sales dropped 29.8% month-over-month and 41.2% year-over-year. Buyers are navigating a landscape where higher rates reduce purchasing power, yet demand remains concentrated in specific price tiers. To mitigate these costs, some sellers offer buydowns. A standard 3-2-1 buydown on this median price would cost $15,240 upfront (3.74% of the sale price), reducing the rate to 4.4% for the first year and lowering the monthly payment by $625. A 2-1 buydown costs $7,740 (1.9% of the price), dropping the initial rate to 5.4% with a $427 monthly savings. These incentives effectively bridge the gap between current rates and buyer affordability thresholds. ALEX Intelligence estimates these scenarios using the median sale price and current Freddie Mac data. The market shows that while prices are up, the volume of transactions is down, suggesting that financing terms play a critical role in closing deals this month. Shopping in San Marcos? Tell us what you want and we'll send matching homes as they list. Data from Unlock MLS. Information deemed reliable but not guaranteed. Model outputs are ALEX Intelligence estimates, not appraisals. Read more Central Texas market data on the ALEX blog: https://alex-companies.com/blog MIT, Nvidia, Google & IBM-Trained. Cross Domain-Expert: Quantum, AI, Ethics, Sovereignty, Intelligence, Philanthropy. Solepoint Planning. VUI AI Cloud Architect. AI Certifications Development. Quant/AI Instructor. Castor Venture Club Member. Associate Broker. George Arnold Alexander III, MPA Director, ALEX Companies Associate Broker, Alexander Tiffany Southwest, LLC dba ALEX.realestate, et.al. Texas License #574878-B · Broker License #565194-BB Broker, ALEX Real Estate · North Carolina License #367733 Independent Broker, ALEX Real Estate · Colorado License #II.100112456 [email protected] · +1 713.918.9951