Is Now a Good Time to Buy a House in the Bay Area—Despite High Interest Rates?

The Bay Area housing market has always been one of the most competitive and high-priced in the country. But with interest rates remaining elevated through 2024 and into 2025, many would-be buyers are asking the critical question: Is now really a good time to buy a home in the Bay Area?

The short answer? It depends on your financial goals, timeline, and tolerance for uncertainty—but for the right buyer, opportunities do exist, even in this higher-rate environment.

The Interest Rate Reality

Mortgage rates have more than doubled from their historic lows of 2020 and 2021. In some cases, buyers are looking at rates north of 7%, which can significantly impact monthly payments and long-term affordability.

However, it’s important to view rates in context. Today’s rates are closer to historic norms. For decades, 6–8% rates were the standard, and people still bought homes, built equity, and thrived.

Why Some Buyers Are Still Jumping In

Despite higher borrowing costs, there are three key reasons some buyers are still eager to purchase:

Less CompetitionFewer buyers in the market means less bidding war drama. While Bay Area homes still move quickly, it’s not uncommon to see listings with price reductions or longer days on market—especially in areas like San Francisco, Oakland, or Marin.

Negotiation Leverage
With sellers adjusting to the reality of slower sales, buyers may find more flexibility in price, contingencies, or even closing costs. This was virtually unheard of during the pandemic-fueled frenzy.

Potential to Refinance Later
“Marry the house, date the rate” has become a common phrase. Buyers who can comfortably afford current rates may refinance if and when rates drop in the next 1–3 years. Locking in a home now could mean getting ahead of future price increases when demand rebounds.

Bay Area Market Trends to Watch

Prices Have Stabilized—For Now
After surging during the pandemic, home prices across the Bay Area have mostly plateaued or dipped slightly in some regions. This has created a unique window for buyers who were previously priced out.

Inventory Is Still Tight
Many current homeowners are holding onto their low mortgage rates, reducing supply. That’s helped support prices, even as demand cools. In hot pockets like Berkeley, Palo Alto, and parts of the East Bay, well-priced homes still sell quickly.

Rents Are Rising Again
For renters watching their monthly costs climb, owning may offer more predictability. In high-demand neighborhoods, buying—even with today’s rates—can be a smart long-term hedge against rising rents.

So, Should You Buy Now?

You might consider buying now if:

• You plan to stay in the home for 5+ years
• You've built up savings and can comfortably afford current payments
• You find a home that checks your boxes in a location you love
• You're prepared for the risk (and reward) of refinancing later

On the flip side, it may be wise to wait if:

• Your job or lifestyle is in flux
• You’re stretching your budget too thin
• You believe rates or prices will fall significantly (and are willing to take that risk)

Final Thoughts
Buying a home is never purely about timing the market—especially in a region as dynamic and resilient as the Bay Area. Yes, rates are higher, but that alone doesn’t make now a bad time to buy.

Instead, focus on what you can control: your finances, your goals, and your readiness for the responsibility of homeownership. If the numbers work and you find the right property, today’s market could offer opportunities not seen in years.

Want help navigating the Bay Area housing market? Let’s talk about your goals—and whether now makes sense for you.

-Alex