For the first time in years, I'm having different conversations with buyers. The question used to be "Should I wait for rates to drop?" Now it's "Are rates going to stay here?" The answer matters — and the implications for Bay Area real estate are significant.
Where Rates Actually Are
As of early 2026, 30-year fixed rates are hovering in the 6.5%–7% range for conventional loans. Jumbo loans (which most Bay Area buyers need) are typically a quarter to half point below conventional. And rate buydowns from sellers and builders have become a regular part of the negotiation.
That's a different world than the 3% pandemic era. But it's also no longer the moving target it was in 2023 when rates were spiking weekly.
Why Stability Matters More Than the Number
Here's the thing nobody talks about: buyers don't actually need low rates to transact. They need predictable rates to plan.
When rates were volatile, every offer involved guessing where rates would be at close. Buyers were afraid to lock too early or too late. Sellers were afraid the buyer's financing would fall through if rates spiked. Lenders were quoting daily.
Now? Buyers can plan. Pre-approvals hold. Monthly payment math doesn't shift every week. That's huge for activity.
"Rates aren't going back to 3%. But they're also not going to 9%. Plan for the world that exists, not the one you wish existed."
What This Means for Buyers
If you've been waiting for rates to drop, here's the uncomfortable truth: by the time rates come down meaningfully, prices will likely have moved up.
A 1% rate drop typically increases buyer purchasing power by ~10%. Which means in markets like ours, prices respond. The buyers who waited from 2023 to 2024 to time the rate market mostly paid more by the time they bought.
What I tell my buyers right now:
- If the math works at today's rates, buy the right house.
- If rates drop later, you can refinance. You can't go back in time and pay 2024 prices.
- Don't try to time rates. Time the right home.
What This Means for Sellers
For sellers, stable rates mean buyers can actually transact. The 2023 paralysis is largely gone. The buyers who held off are coming back to the market, especially in the Peninsula's most desirable areas.
If you've been waiting to list because you thought the market was too soft, look around: in core Peninsula markets, multiple-offer situations are back, days on market are dropping, and over-asking sales are common again.
The window for sellers right now is genuinely good. Spring of 2026 will likely be the strongest selling season we've seen in three years.
The Refi Conversation
One last thing: a lot of buyers ask whether they should plan to refinance "when rates drop." Here's the realistic version:
- If rates drop by 0.75%+ from where you bought, refinancing usually makes sense.
- The cost to refi is typically 1–2% of the loan amount.
- For a $1.5M jumbo loan, that's $15K–$30K. Make sure the savings exceed it.
Most buyers who buy in 2026 will likely refinance at least once before they sell. That's fine. The math still works.
If you've been on the sidelines waiting for the "right time" — whether buying or selling — let's have a real conversation about your specific situation. The market is unpredictable, but your situation isn't.