Should You Wait for Mortgage Rates to Drop Before Buying in San Francisco?

No. If you're ready, willing and able to buy, the rate environment shouldn't be the thing that stops you. Mortgage rates just climbed back to about 7%, and I understand the instinct to wait for them to come down. But over any ten-year stretch since 1995, condo prices in the San Francisco metro area have gone up 257 times out of 258. You can refinance a rate. You can't refinance the price you paid.

Key Findings

• Rates are back near 7%. Freddie Mac's 30-year fixed average hit 6.95% for the week of September 17, up from 6.76% a week earlier, and daily trackers had it above 7%.
• Ten years has almost always been enough. In the S&P Case-Shiller condo index for the San Francisco metro, 257 of 258 rolling ten-year periods since 1995 ended higher. The one exception, February 2001 to February 2011, finished 1.4% lower.
• Five years has not. Fifty-nine of 318 rolling five-year periods ended lower, the worst by about 36%. Time in the home is doing the work, not the entry point.
• Waiting for a lower rate can cost more than the rate does. On a median-priced SF condo, dropping from 7% to 6% saves about $650 a month. A price rise of roughly 11% wipes that out, and the condo median just rose 22% in a year.
• The rate is the part you can fix later. A refinance can lower your payment if rates fall. Nothing lets you go back and buy at last year's price.

Why Are Mortgage Rates Back Near 7%?

A few things landed in the same week. The Federal Reserve raised its benchmark rate by a quarter point, its first hike in three years. The 10-year Treasury, which mortgage rates track more closely than they track the Fed, has climbed to its highest level in nearly two decades. And NAR reported that its chief economist, Lawrence Yun, now expects 7% to become the "new normal."

Freddie Mac's weekly survey put the 30-year fixed at 6.95% as of September 17, against 6.26% a year earlier. Back in February, rates briefly touched about 5.9%. Buyers who watched that happen are now watching it reverse, and nationally they're pulling back: the Mortgage Bankers Association reported purchase applications down 19% from a year ago.

I get it. Nobody likes buying the week rates go up. But "rates went up" and "now is a bad time to buy" are two different statements, and only one of them is true.

Does Waiting for Lower Rates Actually Save You Money?

Usually not in San Francisco, and the math is simple enough to run yourself.

Take the median condo that sold in San Francisco in August, about $1,233,000, with 20% down. That's a loan of about $986,400. Here's the monthly principal and interest at a few rates:

Illustrative only. $1,233,000 price, 20% down, 30-year fixed, principal and interest only. Excludes taxes, HOA dues and insurance. Your loan size, loan type and credit will change the rate you're actually offered.

Now run it the other way. Say you wait a year and rates fall a full point, from 7% to 6%. For your payment to stay the same, the price only has to rise about 11%. If rates fall half a point, to 6.5%, a price increase of about 5% cancels it out.

That's not a hypothetical in this city. The San Francisco condo median rose 22% in the year to August, as I covered in this month's market report. Some of that jump was a weak comparison month last year, and I wouldn't bet on a repeat. But a buyer who sat out the last twelve months waiting for a better rate is now looking at a worse rate and a higher price.

Do San Francisco Home Prices Really Go Up Over Ten Years?

Almost always, and I want to be precise about "almost," because this is the whole argument.

I pulled the S&P Case-Shiller condo price index for the San Francisco metro area, which runs monthly back to January 1995, and checked every ten-year window in it. There are 258 of them. In 257, prices were higher at the end than at the start. The median gain was about 46%.

The one exception tells you something useful. A buyer who closed in February 2001, right at the top of the dot-com run, was about 1.4% down ten years later, in February 2011, at the bottom of the post-2008 slump. That buyer caught two crashes in one decade and still came out roughly even.

Shorten the window and the picture changes. Of 318 five-year windows, 59 ended lower, and the worst, starting in early 2007, lost about 36%. The index is still about 7% below its April 2022 peak today. Someone who bought a condo that spring and needed to sell this year would have felt it.

So the honest version of the rule isn't "prices always go up." It's that in this market, time in the home has done far more for owners than the timing of the purchase. Ten years has almost never failed. Two or three years can.

I'll add one more thing, because I'd rather be useful than convincing. The last ten years for condos specifically were slow: about 20% from June 2016 to June 2026, or under 2% a year. Condos in this city don't compound the way houses have. Buy one because you want to live in it, and let the appreciation be a bonus rather than the plan.

What Does "Ready, Willing and Able" Actually Mean?

It's the only timing test I trust, and each word carries weight.

Ready means your life says it's time. A job you expect to keep, a household that's settled, a reason to stay put. Given the five-year numbers above, I'd want a buyer to be comfortable holding for at least five to seven years, and ideally ten.

Willing means you've found a home you'd be glad to live in, not one you're settling for to beat a rate move. If the place is right, a quarter point doesn't change that. If it's wrong, a lower rate won't fix it.

Able means the payment works at today's rate, not at the rate you hope to refinance into. You're pre-approved, you have reserves after closing, and you've read the building's financials. Condos add a layer here, since lenders now review the whole project more closely, which I walk through in why a condo gets stuck at the lender.

If all three are true, the market will almost never give you a reason to wait that's worth what waiting costs. If one of them isn't, wait, but wait for that reason, not for the rate.

Can You Refinance If Rates Drop Later?

Often, yes, and it's the part of this conversation that doesn't get enough airtime. The rate you close at doesn't have to be the rate you keep. Rates have made short, sharp pullbacks several times in the last few years, including February's dip, and owners who were ready used them to refinance.

Two cautions. A refinance costs money, so it only makes sense when the drop is large enough to pay those costs back in a reasonable time. And it's never guaranteed. That's why "able" means the payment works today. Buy at a rate you can live with for the life of the loan, and treat any refinance as an upside rather than part of the budget.

This is general information, not lending advice. Your loan officer should run your own numbers, and it's worth getting pre-approved before you start touring seriously.

Is Anything Different About Buying Right Now?

One thing works in your favor. Higher rates thin out the competition. Nationally, purchase applications are down sharply from a year ago, and a buyer who's still shopping at 7% is shopping with fewer people. In San Francisco that effect is uneven. Houses remain intensely competitive, but the condo market has pockets with real inventory, and those are the places where a prepared buyer can negotiate on price or ask for credits toward closing costs or a rate buydown.

From experience: the buyers who struggle most with rate moves are almost never the ones who bought at a "bad" rate. They're the ones who spent a year waiting for the perfect moment, watched prices move against them, and then felt they had to catch up. Buying well is mostly about knowing your own number and your own timeline. Once those are settled, the headline rate becomes one input among many rather than the reason you're still renting.

That same idea runs through why paying over asking isn't the same as overpaying. The number that matters is what the home is worth to you over the time you'll own it, not where the market happened to be the week you signed.

Strategic Implications

For Buyers

• Decide whether you're ready, willing and able. If you are, let the rate shape your budget, not your timeline.
• Underwrite the payment at today's rate. Treat a future refinance as a bonus.
• Plan to hold. The data rewards owners who stay five years or more and punishes short holds.
• Use the thinner competition. Where condo inventory is building, negotiate price and credits rather than waiting for the rate to do the work.

For Sellers

• Rate headlines shrink the buyer pool, but the buyers still shopping at 7% are serious. Price for them from day one.
• If you're selling one home to buy another, the rate you give up and the rate you take on belong in the same calculation. I cover the sequencing in should I sell before buying or buy first.
• Offering a credit toward a buyer's rate buydown can do more for a sale than a price cut of the same size, because it lowers the payment the buyer actually feels.

For the Luxury Market

• Many luxury buyers finance selectively or not at all, so rate moves matter less at the top of the market than at the median.
• For financed luxury purchases, jumbo pricing doesn't always move with the conforming rates in the headlines. Get quotes from more than one lender.
• The ten-year argument is strongest where supply is thinnest. In San Francisco that's single-family houses and the best-run condo buildings.

Frequently Asked Questions

Should I wait for mortgage rates to go down before buying a home in San Francisco?

If you're otherwise ready to buy, waiting for rates alone is usually a weak strategy. In the San Francisco metro, condo prices have risen over 257 of 258 ten-year periods since 1995, and a modest price increase can erase the savings from a lower rate. Buy when your finances and timeline are ready, and refinance later if rates fall.

What are mortgage rates right now?

Freddie Mac's 30-year fixed average was 6.95% for the week of September 17, 2026, up from 6.76% the week before and 6.26% a year earlier. Daily lender trackers put rates slightly above 7% the same week.

How much more does a 7% rate cost than a 6% rate on a San Francisco condo?

On a $1,233,000 condo with 20% down, principal and interest run about $6,563 a month at 7% and about $5,914 at 6%, a difference of roughly $650. A price increase of about 11% would cancel that saving entirely.

Have San Francisco home prices ever fallen over ten years?

Once, in the condo data. In the S&P Case-Shiller condo index for the San Francisco metro, a buyer in February 2001 was about 1.4% lower by February 2011, after both the dot-com crash and the 2008 downturn. Every other ten-year window since 1995 ended higher. Over five years, declines have been much more common.

Can I refinance if mortgage rates drop after I buy?

Usually, provided your credit, income and home value still qualify and the rate drop is big enough to cover refinancing costs. It isn't guaranteed, so make sure the payment works at the rate you close with.

What does "ready, willing and able" mean for a home buyer?

Ready means your life and job support staying put for several years. Willing means you've found a home you actually want. Able means you're pre-approved, the payment works at today's rate, and you'll have reserves after closing. When all three are true, the timing is right regardless of the rate headlines.

Work With Sean Mamola

Wondering whether you're ready to buy, even at 7%? Sean Mamola brings 17+ years of San Francisco real estate experience and a luxury hospitality background to every client relationship, with a track record that runs from entry-level condos to an $8.7M South Beach penthouse. As a Global Luxury Specialist with Compass, Sean helps buyers run the real numbers on their own timeline, so the decision to buy is based on their life rather than the week's rate headline. Schedule a consultation or call (415) 704-3640.