In January 2022, the average 30-year mortgage rate was a little over 3%. By October it had passed 7%. Rates more than doubled in less than a year, one of the sharpest increases in the history of the modern mortgage market, and it ended the housing boom almost overnight.
What happened next explains much of the San Antonio market today.
What doubling the rate does to a payment
The easiest way to see the effect is the monthly payment. On a 30-year loan, principal and interest only:
- $250,000 at 3%: about $1,054 a month
- $250,000 at 7%: about $1,663 a month
- $300,000 at 3%: about $1,265 a month
- $300,000 at 7%: about $1,996 a month
Same house, same loan, roughly $600 to $730 more every month, or more than $7,000 a year. Before taxes and insurance. For many buyers, that difference was the whole budget. Plenty of people who could comfortably buy a home in 2021 simply could not in late 2022, without any change in the price of the house.
Buyers stepped back
Demand dropped quickly. The bidding wars ended, homes started sitting on the market for weeks instead of days, and sellers who had been planning on multiple offers found themselves negotiating. Price growth stalled, and in many neighborhoods, sellers began cutting prices or offering to pay buyers' closing costs to get deals done.
Owners stayed put
The bigger long-term effect was on sellers. Millions of homeowners nationwide, and many thousands in San Antonio, had locked in mortgages near 3% during the boom. Selling would mean giving up that rate and borrowing again at twice the cost. So many of them did not sell. Economists started calling it the "lock-in effect."
That kept the number of resale homes for sale low even as demand cooled, which is part of why prices held up better than many expected. Over time, though, life events still forced moves: jobs, family, military orders. Inventory gradually built back up, and today there are about 13,500 homes listed across the San Antonio area, with the typical listing on the market for more than two months.
Builders found a way around it
New-home builders had an advantage resale sellers did not: they could pay to lower the buyer's rate. Many San Antonio-area builders began offering mortgage rate buydowns through their affiliated lenders, along with help on closing costs. For a buyer, a builder covering a couple of points of interest can be worth more than a price cut, because it lowers the monthly payment directly.
That is a big reason new construction became so competitive in this period, and why it is worth comparing new home communities alongside resale homes today. Just read the incentive closely: ask whether the lower rate is fixed for the life of the loan or only for the first few years, and whether it requires using the builder's lender.
Renters felt it too
Higher rates also kept many would-be buyers renting longer, which supported rental demand. At the same time, the build-to-rent communities planned during the boom kept delivering new rental homes. The result today is a large rental market of single-family houses, with about 4,900 homes listed for rent across the region and a median asking rent around $1,700.
What it means now
If you are buying, the rate matters as much as the price. Get pre-approved early, compare a resale home's price cut against a builder's rate buydown in monthly-payment terms, and remember you can refinance later if rates fall, but you cannot go back and pay less for the house.
If you are selling, you are competing with builders who can buy down rates. Pricing it right from the first day, and being open to helping with a buyer's closing costs or a rate buydown of your own, can matter more than holding out for the asking price.
If you own a rental, people renting longer has kept demand steady, but new rental homes keep adding competition. Pricing it to the market, not to last year, keeps it from sitting empty.
*Payment figures are principal and interest on a 30-year fixed loan, rounded. Market figures are from listings on the San Antonio MLS at the end of September 2026. See our latest home price and rental market updates.*