We kicked off 2024 with much hope for multiple interest rate cuts. But last Friday’s inflation measure didn’t do us any favors.

The Personal Consumption Expenditures index rose 2.7%, up from 2.5% in February, not exactly laying the groundwork for interest rate cuts. This was much higher than The Fed’s 2% goal.

So we’ll be sitting with these rates for probably most of the year. 30-year fixed loan rates are above 7% at the moment. Though that may fluctuate a bit throughout the year, I don’t believe we’ll be seeing rates that are substantially lower in 2024.

What that means for San Francisco real estate is that buyers will need to continue figuring out what they afford at current rates. If it’s possible to bump up your down payment and borrow less money—think 30% down or more—now is a good time to do that. It may mean shifting your overall price range, but I’ve always been a fan of buying what you can afford and trading up later.

Sellers will need to adjust expectations for how high their property value can go in the current market—particularly if you bought your home over the last five years. A lot has changed since Covid and interest rate hikes, and these factors are affecting our market.

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