SF Bay Area Market Update 2026
1. Mortgage Interest Rates
US Mortgage Rates Slide to One of Lowest Levels Since 2022
The contract rate on a 30-year mortgage dropped 7 basis points to 6.18% in the week ended Jan. 9, according to Mortgage Bankers Association data released Wednesday. The rate on a five-year adjustable mortgage plunged nearly a half percentage point to 5.42%, the second-lowest since May 2023. Against a backdrop of cheaper home-financing costs, MBA’s purchase index increased nearly 16% last week to the second-highest level since February 2023.
2. Consumer Sentiment + Housing Outlook
US consumer sentiment perks up in early January
WASHINGTON, Jan 9 (Reuters) - U.S. consumer sentiment perked up in early January, but households continued to worry about inflation and a weakening labor market, a survey showed on Friday.
The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index increased to 54.0 this month from a final reading of 52.9 in December. Economists polled by Reuters had forecast the index rising to 53.5.
2026 Housing Outlook
NAR’s 2026 outlook points to lower mortgage rates + modest price growth, with affordability improving primarily through lower monthly payments.
3. Local Job Growth
Where are the jobs being created? What are the trends in Work From Home policies?
AI boom fuels San Francisco’s latest office leasing achievement
Vacancy drops as demand hits post-pandemic high.
In San Francisco this year, companies signed leases for more than 10 million square feet of office space, a sharp redirection for a city that, not too long ago, lagged behind all others in the rate of workers returning to the office since the pandemic.
The 10.2 million square feet in office leases is the most in the city since 2019, according to CBRE. Yet, the city hit another milestone it hasn’t reached in more than a decade.
Year-over-year office vacancy fell by three points to 33.5 percent as of December, the most significant vacancy decline since 2011, when the country’s economy was crawling out of the Great Recession, according to the same CBRE report.
Bay Area and California rebound with job gains after months of losses
The Bay Area and California both posted robust job gains in November that represented rebounds from months of feeble hiring trends marred by waves of employment losses.
Another AI company just moved to Union Square
Chalk, a three-year-old AI data platform company, leased nearly 15,000 SF at 55 Stockton St. near Union Square—an upgrade from roughly 4,500 SF in the Mission. The signal here isn’t just “AI news.” It’s a commitment to more space in a central SF location, which can be a leading indicator for neighborhood momentum, retail foot traffic, and broader confidence in the downtown core.
Nvidia Prepares to Set Up Shop in San Francisco
Ubiquitous chipmaker Nvidia is looking to grow its Bay Area footprint with offices in San Francisco’s Mission Rock mixed-use development.
AI Giant Anthropic Expands San Francisco Headquarters at Howard and 2nd
Dario Amodei-run Anthropic is bulking up its operations in downtown San Francisco with 100,000 square feet of offices. This will affect demand for housing in SOMA, "Yerba Buena", and South Beach
4. Cost of Housing + Rents
The relative cost of housing matters. Rents vs Costs of Ownership.
Rents are rising in S.F. — and the surge is now spreading beyond the city
With a wave of new renters and few new homes built to absorb them, prices have grown even faster over the past year. SF Chronicle
Condos used to be ideal starter homes. Now, they’re harder than ever to own
HOA costs have been rising. A perfect storm of rising construction costs, an imploding insurance market, and a growing “blacklist” have conspired to diminish values.
5. Local Zoning / City Improvements
What's being done in the area to improve it's quality of living?
Is it becoming more of an attractive place to live?
Betting on SF Again
2025 brought early signs of a downtown reset: bargain pricing drew institutional buyers back, AI-led leasing helped the strongest corridors stabilize, and new policy reduced friction for reinvestment. The takeaway for buyers and sellers: recovery won’t be uniform—momentum will show up first in the blocks where leasing, upgrades, and capital are actually landing.
markchoey.com
Last updated: January 2026