Rates Just Dropped! What does that mean for San Francisco?

The Fed dropped interest rates - now what?

Rates go up, rates go down… and this week, they went down. The Fed just made a cut, and that single move has buyers and sellers in San Francisco perking up.

A few months back, I sat with a couple of first-time buyers. Pre-approved, spreadsheets on lock, ready to go … but every quarter point hike made their dream payment slip out of reach. This cut shaved hundreds off their monthly. Suddenly, instead of “we can’t,” they’re back at “we’re ready.”

On the seller side, I’ve got a client who bought during the pandemic boom. He’s been waiting for “the perfect moment” to list. He even quoted me something he heard … for every 1% drop in rates, prices go up 7%. That little stat gets tossed around a lot. Is it true? Not exactly. But here’s what is true: cheaper money brings more buyers into the pool, and more buyers usually means stronger competition.

So, what happens next?

• Buyers breathe easier. Lower monthly payments mean they can stretch for the home they actually want instead of the one they’re settling for.

• Sellers benefit, because buyers feel like they can finally move. That energy brings activity (and sometimes, higher prices).

• Timing counts. If you lock before the next swing, or if you list while buyers are energized, you’re playing the market instead of watching it pass you by.

Does this mean buyers should start flinging overbids at everything in sight? No. Every buyer’s math is different. Every listing calls for its own strategy.

And sellers, this isn’t a free-for-all either. You can’t slap a dream number on your house and expect it to fly off the shelf. A smart prep, a sharp strategy, and yes… the right agent… that’s what matters.

So if you’re thinking of buying or selling, now, or soon, let’s sit down. We’ll look at what this rate cut does for your monthly payment, or your buyer pool, and make a plan that actually works.