How to Buy a Home in San Francisco Without Waiting for Lower Rates

Many buyers in San Francisco are holding off on purchasing real estate, hoping that mortgage rates will drop significantly. But is that the best strategy? According to recent projections, rates are expected to decline, but not dramatically.

While waiting might seem like the safer choice, delaying could mean missing out on prime investment opportunities—especially in a competitive market like SF, where home values tend to appreciate over time. The good news? There are smart financing strategies that can help you buy now, even in today’s higher-rate environment.

How Much Will Mortgage Rates Drop?

Earlier this year, some experts predicted rates could dip below 6% by the end of 2024. However, recent forecasts from Fannie Mae, the Mortgage Bankers Association, and Wells Fargo now suggest rates will likely stabilize around 6.5% to 7%.

For buyers waiting for a drastic drop, this means you could be sitting on the sidelines for longer than expected. And in a market like San Francisco, where property values historically appreciate, waiting could cost you more in the long run.

If you're considering buying due to a job relocation, family expansion, or investment opportunity, it may be time to explore alternative financing strategies to make homeownership more affordable right now.

Creative Financing Strategies for SF Buyers

Since rates may not drop as much as some had hoped, here are three financing options that can help you secure a home sooner rather than later:

1. Mortgage Buydowns: Lower Your Rate Upfront

A mortgage buydown allows you to pay an upfront fee to lower your mortgage rate for the first few years of your loan. This can significantly reduce your monthly payments early on, making it easier to afford a home in San Francisco’s high-priced market.

This strategy is becoming more common, with 27% of real estate agents reporting that first-time buyers are negotiating rate buydowns with sellers. If you're purchasing in a competitive neighborhood like Noe Valley or Pacific Heights, this could be a great way to lock in a lower rate without waiting for market conditions to change.

2. Adjustable-Rate Mortgages (ARMs): Flexibility in a Changing Market

An adjustable-rate mortgage (ARM) typically offers a lower introductory rate than a 30-year fixed mortgage. If you plan to refinance in a few years or don’t intend to stay in the home long-term, an ARM can help you save money upfront.

Worried about the risks? Unlike the pre-2008 market, today’s ARMs require buyers to qualify based on their ability to cover higher future payments. That means lenders verify income and financial stability before approval—helping mitigate risks.

3. Assumable Mortgages: Take Over a Lower Rate

With an assumable mortgage, you can take over the seller’s existing loan—and their lower mortgage rate. This option is especially attractive in San Francisco, where many homeowners secured ultra-low rates during the pandemic.

According to U.S. News, more than 11 million homes nationwide qualify for assumable mortgages, making this a worthwhile strategy to explore. If you’re eyeing a property in neighborhoods like The Marina or Inner Sunset, asking about an assumable loan could give you an edge.

Bottom Line: SF Buyers Should Think Strategically

Waiting for mortgage rates to drop significantly might not be the best approach—especially in a city where real estate values continue to climb. Instead, consider strategies like buydowns, ARMs, or assumable mortgages to make homeownership more affordable today.

If you're thinking about buying in San Francisco this year, let's talk about your options. Whether you're looking for an investment property, a luxury condo, or a single-family home, there are ways to structure your financing that work in your favor.

📩 Contact me today to explore the best opportunities in SF real estate!