San Francisco Bay Area, California

Welcome to the San Francisco Bay Area HousingGauge, your weekly local market report for the week of October 5, 2026.

Here is the headline. San Francisco Bay Area's HousingGauge score is 31 out of 100, which puts the market in the RED zone. Conditions have weakened over the past three months, and financing remains expensive.

Three developments stand out this week.

First: Mortgage rates up 0.85 points in three months. The 30-year fixed rate averages 7.28%, versus 6.43% three months ago.

Second: Score down 12 points over 13 weeks. The score moved from 43 to 31 over the past 13 weeks, driven mainly by Mortgage Conditions (−6.3 points).

Third: Rents up 10.8% year over year. Typical rent is $3,409 a month, for a gross rental yield of 3.5%.

Now, what is behind the score?

Mortgage Conditions scores 12 out of 100. The 30-year fixed rate averages 7.28%, up 0.82 percentage points over six months. Financing remains expensive, limiting affordability for leveraged buyers.

Supply & Buyer Leverage scores 13 out of 100. Inventory is 7.8% lower than a year ago (5,846 active listings), with 2.1 months of supply. Homes take a median 21 days to sell at 105.8% of list price, and 14.5% of listings have had a price cut. Sellers retain most of the negotiating leverage.

Monetary Conditions scores 53 out of 100. The real policy rate is 1.24%, 0.23 points above the estimated neutral rate (r-star) of 1.01% — a near neutral stance. The fed funds rate has risen 0.24 points over six months.

Demand Trend scores 58 out of 100. Pending sales are 2.6% lower than a year ago and closed sales are 3.3% higher. Days on market are 16.5% shorter than a year ago. Demand is steady.

Valuation & Affordability scores 10 out of 100. The median home costs 8.7 times the median household income. Principal and interest on a typical purchase would take 57.1% of that income at current rates. Inflation-adjusted prices are 2.8% higher than a year ago. Prices are stretched relative to local incomes.

Local Economy scores 34 out of 100. Local unemployment is 4.6% and employment is down 1.6% year over year. The local job market is softening.

Rental Economics scores 45 out of 100. A year of median rent equals 3.5% of the median price (a price-to-rent ratio of 28.9). Rents are up 10.8% year over year. Rental economics are middling.

The score is down 1 point from last week's report (32 to 31). Over 13 weeks it is down 12 points, from 43 to 31. The largest contributors were Mortgage Conditions (−6.3 points) and Monetary Conditions (−2.9 points).

So what would move San Francisco Bay Area into the yellow? It would take several changes together: 30-year mortgage rate falls below 6.40% (now 7.28%); pending sales grow more than 9.0% year over year (now −2.6%); the Fed cuts more than 0.35 pts over six months (now +0.24 pts); policy gap (real policy rate minus r-star) narrows below −0.65 pts (now +0.23 pts); months of supply rises above 3.8 months (now 2.1 months); and mortgage rates rise less than 0.05 pts over three months (now +0.85 pts).

And what could make conditions worse? Watch for these together: 30-year mortgage rate rises above 7.65% (now 7.28%); pending sales fall more than 7.5% year over year (now −2.6%); the Fed raises rates more than 0.50 pts over six months (now +0.24 pts); policy gap (real policy rate minus r-star) widens above +0.60 pts (now +0.23 pts); and months of supply falls below 1.5 months (now 2.1 months).

That is the San Francisco Bay Area HousingGauge for this week. The HousingGauge score describes market conditions. It is not a recommendation to buy or sell, and it is not individualized financial advice. For charts, sources and the full methodology, visit housinggauge.com. Thanks for listening.