Elevated mortgage rates above 7% represent the dominant factor tempering buyer demand and compressing price appreciation in the San Francisco metro area, even as AI-driven wealth sustains a seller’s market with tight inventory. Zillow’s typical home value stood at approximately $1.123 million through August 2026, up 2.3% year-over-year, while median sale prices ranged from $1.16 million to $1.56 million depending on the dataset, reflecting competitive bidding yet slower absorption. Low months’ supply and sales above list price support current levels near the $1.08–1.10 million band, but persistent rate pressure and seasonal Q4 dynamics introduce downside risk. Traders price in modest stabilization rather than sharp gains or declines through year-end resolution.