Is It Better to Buy or Rent in San Francisco?


An influx of residents and job opportunities combined with a stagnation of affordable housing being built has resulted in San Francisco’s real estate market becoming one the most expensive in the entire world.

Many individuals and families have unfortunately had to endure astronomical rent and mortgage payments for the last few years and the struggles they’ve faced when simply trying to put a roof over their head has been a highly contentious topic, bringing to light issues like hypercapitalism and gentrification.

Regardless, for those who call or seek to call San Francisco their home, paying for the high cost of living is inevitable. This brings the question to light: Is it better to buy or rent in San Francisco?

Can You Afford It?

As many of us now know, San Francisco is the most expensive place in the world to rent. Still, it’s actually cheaper to rent than it is to buy a house, a trend rarely seen in any housing markets around the world.

Both renters and homeowners are feeling the pressure to keep up with skyrocketing housing prices. According to a 2019 study by Rentcafe, the average rent for a San Francisco apartment is $3,609. People who are looking to buy a home with a San Francisco address should expect to pay an average of $4,100 a month due to its $1,298,000 median sales tag to buy a home.

As a cheaper alternative form of housing, many more San Francisco residents are renting out rooms in shared apartments as opposed to seeking an entire unit.

Long-term or Short-term?

When deciding if it’s better for you to rent or buy a home in San Francisco, there are many variables that must be taken into consideration. One of the first things you should consider is how long you plan to stay in that home.

As a general rule of thumb, a homebuyer should plan on living in their home five to seven years, the average amount of time it takes to recoup all extra costs related to obtaining a mortgage and selling a home. Of course, this is just a general rule based on the average American market. We all know that San Francisco isn’t the average American market. We’ll dive deeper into using rent-versus-buy calculators in the next section.

This being said, you should think twice about buying a home if you fall under any of these circumstances:

  • You plan on making major life changes
  • You don’t plan on staying in the same location for an extended period of time
  • Your household size may change
  • You aren’t ready to take on the responsibilities of owning a home

Use Own-vs-Rent Calculators to Determine Feasibility

According to a 2018 study by Truila, San Francisco and San Jose are the only two markets in the entire country where the cost to rent is actually cheaper than the cost to buy a home costing 5.8% and 12.2% less respectively.

Tools like rent-versus-buy calculators will help assist you to determine if buying or renting your new home will yield more value. By entering data such as your desired home location, the price of the home, down payment, mortgage interest rate, and loan term, rent-versus-buy calculators will help you determine the “break-even point” showing you how long you’ll need to reside in a home before the price to buy becomes cheaper than renting.

By plugging in the average San Francisco home price and average rent into Nerdwallet’s rent-versus-buy calculator, it would take a staggering 25 years to reach the break-even. That means you would need to live in your home 25 years for it to cost less to buy a home instead of renting.

The break-even point for a San Francisco home is much further ahead into the future than that of the average American home. In comparison, the break-even point for the average American home is five to seven years.

Before Buying, Make Sure It’s the Right Home For You

Before deciding to purchase a home, you need to understand that this is a life-changing purchase and a huge commitment. Just because you’ve found a home that’s in your budget doesn’t mean it’s the home for you.

Make sure you love the house and the neighborhood it’s located in. A couple looking to buy a house may want a house big enough to raise a family in a neighborhood with close access to parks and schools.

Make sure you’ll be sure you’ll be able to handle all of the maintenance duties that a homeowner needs to take on. If something goes wrong with the plumbing or if something else breaks in the house, you won’t be able to rely on calling your landlord for help. You ARE the landlord! Ensure you have the know-how and finances to keep your home in tip-top shape.

Remember, a home you decide to buy is likely a home where you’ll decide to spend most of the rest of your life. Make sure the home fits your lifestyle, but don’t forget that YOU must be a good fit for your house too! If you have any doubts about buying a house, it may be in your best interest to rent.

Choosing to buy or rent a San Francisco home is literally a decision of a lifetime. Based on current figures, we know that it’ll take approximately 25 years for the decision to buy a home to cost less than to rent one. If you decide to buy your home, make sure it’s in your budget, but most importantly ensure it serves the lifestyle you want to live now and for the rest of your life. If you have any doubts about buying, consider renting!



  1. Appaswamy

    Buying a house for the first time is the hectic task. This blog clarifies my doubt in a better way and helps me to get confidence.

  2. post

    I like the report

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