Rising Mortgage Rates

Why Rising Mortgage Rates Don’t Matter in This Hot Market

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With mortgage rates climbing back to 7%, it’s easy to feel discouraged about entering the real estate market. But savvy investors know—rates are only one part of the story. In high-growth markets like Santa Clara County, California, appreciation and demand continue to outpace national trends, making it one of the most compelling regions to invest in today.

In February 2025, the median sale price for homes in Santa Clara County hit $1.6 million, marking a 10.9% increase from the year prior. That kind of growth tells a powerful story: despite higher borrowing costs, the value of real estate in this area continues to surge. In fact, the average home value now stands at $1,733,817—an impressive figure that reflects both strong demand and a persistently limited inventory.

What’s driving this momentum? Santa Clara County, part of the greater Silicon Valley region, remains a magnet for professionals, tech talent, and investors alike. Homes here typically sell within just 10 days, highlighting how quickly buyers are moving to secure property in this highly competitive market.

The multifamily housing segment is especially promising. California has seen a 40% increase in multifamily mortgage applications over the past two years, largely due to new zoning reforms that make it easier to develop multi-unit properties. While single-family homes still have their place, more investors are turning to duplexes, triplexes, and small apartment buildings as more cost-effective, income-producing assets. As demand continues to rise, multifamily properties offer both stability and potential for strong returns.

Despite the rise in mortgage rates and concerns about tech sector shifts, the California housing market continues to set new records. In April 2025, the median price for a single-family home statewide topped $904,210—the first time it has ever crossed the $900,000 threshold, according to the California Association of Realtors. Santa Clara County’s performance is a major contributor to that historic milestone.

Everyone’s talking about mortgage rates. But here’s what really matters. In markets like Santa Clara County, where home values continue to climb and demand shows no signs of slowing, opportunity far outweighs short-term borrowing costs. With a sharp strategy and a focus on high-growth areas, smart investors are positioning themselves to win—because in the long run, it’s not about the rate, it’s about the return.