When Will Mortgage Rates Come Down in San Francisco?
If you’re thinking about buying or investing in San Francisco real estate, one of the biggest questions right now is: when will mortgage rates come down? After a rollercoaster of rising rates and uncertainty in 2024, many of us are hoping for some relief.
While it’s impossible to predict exactly when rates will decrease, experts are offering some insights into what we might expect going into next year. Here’s what the latest forecasts are showing for the San Francisco real estate market.
Mortgage Rates Expected to Ease in 2025
After months of volatility, the latest forecasts suggest that mortgage rates should begin to stabilize and ease slightly in 2025. While they may not drop drastically, it’s expected that rates will be lower than where they are now (as shown in the graph below).
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains, “While mortgage rates remain elevated, they are expected to stabilize.”
Key Factors Affecting Mortgage Rates in San Francisco
While the outlook is positive, there are several factors that will affect how and when mortgage rates move in 2025. These elements are interconnected, and rates will likely continue to fluctuate based on them. Here’s what to watch for in the coming months:
Inflation: If inflation cools down, we could see rates dip. However, if inflation continues to rise or remains stubbornly high, mortgage rates may stay elevated for a while longer.
Unemployment Rate: The unemployment rate impacts decisions made by the Federal Reserve (the Fed). Although the Fed doesn’t directly set mortgage rates, their actions are tied to the broader economic situation and can influence rate movements.
Government Policies: With new leadership coming in January, fiscal and monetary policies will evolve, potentially influencing mortgage rates in the process.
As always, these are forecasts based on the most current data, but as we all know, things can change quickly in the real estate market. It’s important not to base your plans solely on predictions but to consider what’s happening right now and how it aligns with your investment strategy.
What Does This Mean for Your San Francisco Real Estate Investment?
The San Francisco market is one of the most dynamic and resilient in the country. While mortgage rates can impact home affordability in the short term, they don’t change the long-term potential for building wealth through real estate. If you’re looking at buying or investing in luxury properties or multi-family buildings in neighborhoods with appreciating values, this could still be a great time to act.
To make the most of the current market conditions:
Focus on improving your credit score to ensure you qualify for the best mortgage rates.
Put aside any extra cash for your down payment—having a larger down payment can help offset higher rates.
Set up an automatic savings plan to build up your cash reserves for future investments.
In San Francisco, real estate continues to be a top-performing asset class for building generational wealth. The potential for appreciation in prime neighborhoods is strong, and even as mortgage rates fluctuate, the long-term value of owning property remains a solid strategy.
Bottom Line
If you’re looking to buy or invest in San Francisco real estate, staying informed about mortgage rate trends is important—but it shouldn’t hold you back from moving forward with your plans. Rates are expected to ease, but no one knows exactly when. The key is to focus on what you can control right now and work with a trusted real estate agent who understands the intricacies of the San Francisco market.
Let’s connect to discuss your options and how these trends impact your next move.
