Mortgage Rates Hit a Three-Year Low

Mortgage Rates Hit a Three-Year Low: What It Means for San Francisco Real Estate

For the first time in nearly three years, mortgage rates have dropped to their lowest point, creating a new wave of energy across the housing market. On September 17, 2025, the Federal Reserve made its first benchmark rate cut since December 2024 a 0.25% reduction that immediately eased borrowing costs. For a market like San Francisco, where affordability has always been a balancing act, this shift could open new opportunities for both buyers and sellers.

Rates for a 30-year fixed mortgage now average around 6.13%, the lowest since 2022. It’s a welcome change after years of elevated borrowing costs, and many in the industry are already seeing a renewed sense of optimism from buyers who had been waiting on the sidelines.

For buyers, this moment offers a bit of breathing room. Lower rates mean smaller monthly payments and a chance to finally step into a market that has felt just out of reach for many. But there’s another side to the story as affordability improves, competition often returns. San Francisco’s limited housing supply means even a modest bump in demand could push prices upward again. In other words, if you find a home that fits your needs, this might be the right time to move quickly and lock in your rate before the market adjusts.

For sellers, this is also encouraging news. A drop in rates tends to bring more qualified buyers back into the mix, creating stronger interest and, in some cases, multiple-offer situations. It may also be a good time for current homeowners to refinance and take advantage of these lower rates while they last.

Of course, rates don’t move in isolation. They’re influenced by bond markets, inflation, and broader economic sentiment which means this window could shift quickly. The key right now is timing and preparation: buyers should have financing lined up, and sellers should connect with a local agent to plan a listing strategy that captures the momentum.

The bottom line? The Fed’s recent cut has created a rare window of opportunity for San Francisco real estate. Whether you’re buying, selling, or simply watching the market, this moment is a reminder that confidence and activity are returning to the Bay Area in a big way.