The rental market in San Marcos also changed significantly. Renter-occupied homes decreased from 74% in 2021 to 65% in 2022. The average rent price declined from $1,311 in 2021 to $1,112 in 2022, a 15% decrease. This drop in rent prices and increase in homeownership suggests a shift in local housing market dynamics, possibly influenced by changes in the student population or local economic factors. More recent data shows the average home price in San Marcos decreased to $350,676 in 2023 and $337,721 in 2024, a 9% decrease from 2022. Federal interest rates rose to 5.02% in 2023 and 5.33% in 2024. This inverse relationship between rising interest rates and falling home prices is common in real estate markets, as higher borrowing costs often lead to decreased demand and lower prices. Predictive models forecast that average home prices in San Marcos may stabilize or slightly decrease in the short term due to the high interest rate environment. Long-term appreciation is likely as the city grows and attracts new residents. Rent prices are expected to gradually increase over the next five years, aligning with population growth and potential shifts towards renting if homeownership becomes less affordable due to high interest rates. San Marcos has experienced an increase in homeownership and average home prices from 2021 to 2022, followed by a cooling period in 2023 and 2024. The rental market has seen a decrease in both the percentage of renters and average rent prices. These trends, influenced by interest rates, local economic conditions, and population changes, indicate a dynamic housing market in San Marcos, with potential for continued evolution in the coming years.