Skip to main content

How’s the market? It’s a common question and given today’s dynamics in the economy, it’s a question we’re hearing more and more. So, how can you answer such a complicated question? Well, one thing we can do is look at the numbers. Freddie Mac put the national average on the 30-year mortgage at 5.3%. However, local data suggests that Bay Area demand for housing still remains strong despite increased rates. While there are some signs of cooling, the market is still active and it might be a good time to sell your home if you’ve been on the fence.

Here are a few looks at the current mortgage situation right now and in the context of the last 12 months.

Freddie Mac Mortgage Rates for the last 12 months

To put things in context, here is a look at mortgage rates since 1974. As you can see, a 5% mortgage rate is more in line with longer-term historical lows. However, consumers seem to have become accustomed to rates around 3%. While the change in rates over the past 6 months has been drastic, historically, we’re not in unfamiliar waters.

Mortgage rates since 1972. Areas marked in gray represent recessions.

So, the look through the national lens shows increasing rates amid strong demand. Nationally, many experts still feel demand will keep pricing strong until later this year or next.

“With home sales under pressure, the parabolic increase in house prices will soon peter out, and some price declines by mid-next year seem more than likely, with rates now moving quickly higher and affordability and demand being hammered, prices will come under pressure.”

Moody’s Analytics chief economist Mark Zandi

The San Francisco Association of Realtors has echoed a similar sentiment in their May 2022 market report:

The average 30-year fixed rate mortgage exceeded 5% in April, the highest level since 2011, according to Freddie Mac. The recent surge in mortgage rates has reduced the pool of eligible buyers and has caused mortgage applications to decline, with a significant impact on refinance applications, which are down more than 70% compared to this time last year. As the rising costs of homeownership force many Americans to adjust their budgets, an increasing number of buyers are hoping to help offset the costs by moving from bigger, more expensive cities to smaller areas that offer a more affordable cost of living.

Nationally, existing home sales are down 2.7% as of last measure, while pending sales dropped 1.2%, marking 5 straight months of under contract declines, according to the National Association of REALTORS®. Inventory remains low, with only 2 months supply at present, and home prices continue to rise, with the median existing home at $373,500, a 15% increase from this time last year. Homes are still selling quickly, however, and multiple offers are common in many markets.

SFAR Monthly Indicators Report May 2022. Cited May 17, 2022
SFAR Monthly Indicators Report May 2022. Cited May 17, 2022

So, what about San Francisco specifically?

New Listings were down 38.7 percent for single-family homes and 26.4 percent for Condo/TIC/Coop properties. Pending Sales decreased 7.3 percent for single-family homes and 29.9 percent for Condo/TIC/Coop properties. The Median Sales Price was up 13.9 percent to $2,050,000 for single-family homes and 13.3 percent to $1,360,000 for Condo/TIC/Coop properties. Months Supply of Inventory decreased 44.4 percent for single-family units and 27.1 percent for Condo/TIC/Coop units. Affordability challenges are limiting buying activity, and early signs suggest competition for homes may be cooling somewhat.

SFAR Monthly Indicators Report May 2022. Cited May 17, 2022

Here is a closer look at the data:

Here are the things to focus on:

  • Bay Area demand remains high and homes continue to sell
  • Months Supply of Inventory decreased 44.4 percent for single-family units and 27.1 percent for Condo/TIC/Coop units
  • Median Sales Price was up 13.9 percent to $2,050,000 for single-family homes and 13.3 percent to $1,360,000 for Condo/TIC/Coop properties
  • New Listings were down 38.7 percent for single-family homes and 26.4 percent for Condo/TIC/Coop properties

With inventory decreasing and prices increasing, it might be a good time to consider letting go of that investment property or making the move now to sell your home and upgrade if you’ve been thinking about it. With fewer properties on the market, there is less competition. Also, with rates at 5%, some buyers have been priced out, but pent-up demand has buyers changing expectations and still trying to break into the Bay Area housing market.

So, in closing, if you’re even just playing with the idea of selling. It’s a good time to sit down and explore your options. Our agents have been meeting with clients every day to talk about the market and get a market analysis of their property. A market analysis of your property is free, and it will give you an idea of where you stand.

Don’t hesitate. Reach out today and speak with one of Kinoko’s property experts. It might be the best decision you make this year. Speak to you soon!

Let’s Talk

You’ve got questions and we can’t wait to answer them.

We use cookies and tracking technology in connection with your activities on our website. By viewing and using our website, you consent to our use of cookies and tracking technology in accordance with our Privacy Policy.