Rent vs Buy in San Francisco: The Real Math

At late-October 2026 rates, buying a typical San Francisco condo or house costs more every month than renting the equivalent. Buying wins only when three things line up: you hold for at least five to seven years, prices grow near their long-run pace, and you can actually use the tax deductions. If any one of those is shaky, renting is the better financial move in SF, and that is a legitimate answer.

Why national rent-vs-buy calculators get SF wrong

Most calculators default to national numbers: property tax near 1%, cheap insurance, 1% maintenance, no HOA and a price-to-rent ratio in the teens. San Francisco breaks every one of them.

• The secured property tax rate for fiscal 2025-26 is 1.1827% of assessed value, set each year by the Board of Supervisors. It was 1.1714% the year before.
• Median HOA dues in the SF metro passed $500 a month in 2025; many city buildings charge $700 to $1,200.
• Sellers pay a city transfer tax of 0.75% on sales from $1M to $5M, on top of a commission.
• The housing stock is old, so maintenance runs toward the high end of the 1% to 4% rule of thumb.
• Prices are high relative to rents. A reported $1.23M median condo against a two-bedroom asking rent around $4,600 (indexes differ; check current figures) is a price-to-rent ratio around 22; a reported $1.86M median house against our assumed $8,000 rent lands near 19. Ratios above 20 generally favor renting unless appreciation is strong.

The inputs that decide it

Four assumptions drive almost all of the answer.

Appreciation is the fifth input and the one you control least. Do not plug in the last twelve months, when SF medians were reported up more than 20% year over year. Test a range of 0% to 5%.

Ownership costs renters forget

Principal and interest is roughly three quarters of the real monthly number. Here is the rest for the two examples used throughout this stage, each with 20% down at 7.32%.

The condo insurance line matches published San Francisco HO-6 averages; the house line is a placeholder in a market where carriers have pulled back, so get a real quote. Earthquake coverage is extra on both. The true monthly cost of owning walks through every line.

Transaction costs in and out

• Buying: plan on roughly 2% of the price for closing costs and prepaids (lender and escrow fees, title, prepaid interest, insurance and impounds), about $22,000 on $1.1M; published California averages are lower before prepaids.
• Selling: a total commission in the 5% range is still typical even though it is negotiable after the 2024 NAR settlement, plus the SF transfer tax (0.68% from $250K to $1M, 0.75% from $1M to $5M, paid by the seller by local custom) and about half a percent of other fees. Call it 6% to 6.5%.

Round trip, that is 8% to 8.5% of the price, about $90,000 on the condo. Over three years that is $2,500 a month of hidden cost; over ten years, $750.

Rent control changes the math if you are in a covered unit

If you rent in a building built before June 13, 1979, the SF Rent Ordinance caps your annual increase, and the cap is 1.6% from March 1, 2026 through February 28, 2027. Single-family homes and condos are exempt from price controls under the state Costa-Hawkins law, so a rent-controlled apartment is a specific asset you give up when you buy. A $4,000 rent growing 1.5% a year is about $4,640 after ten years; at market growth of 3% it is about $5,375. That difference alone adds years to the break-even.

The counterargument is real too: rent control does not protect you from an owner move-in or Ellis Act eviction, and it ties you to a unit that may not fit your life in five years.

Tax effects after the 2025 federal law

The 2025 federal tax law made the $750,000 mortgage interest cap permanent and raised the SALT deduction cap to $40,000 for 2025 and $40,400 for 2026, phasing down for incomes above roughly $500,000. The 2026 standard deduction is $16,100 single and $32,200 married filing jointly.

• On an $880K loan, year-one interest is about $64,000, but only the share on the first $750,000 is deductible federally, roughly $55,000.
• Property tax of $13,000 fits under the $40,000 SALT cap only if your California income tax has not already used it. A couple earning $300,000 has room; a couple above $500,000 may get little or none.
• California does not conform: it allows interest on up to $1M of acquisition debt and does not cap the property tax deduction, so state savings are real but smaller.

Our rough estimate for a married couple in the 24% federal bracket with an $880K loan: $1,200 to $1,500 a month of combined first-year savings, shrinking as interest falls. A single filer gets more; a high earner past the SALT phase-down gets less. Tax benefits of owning has the worksheet.

Break-even scenarios at 3, 5, 7 and 10 years

We modeled both examples with the costs above, $5,000 rent for the condo and $8,000 for the house growing 3% a year, HOA dues growing 4%, a 4.5% return on the renter's cash, 2% buying costs, 6.25% selling costs, and a tax benefit of $1,300 (condo) and $2,000 (house) a month in year one. The figure shown is the owner's net worth minus the renter's at sale.

Appreciation needed just to break even: about 5.2% a year at three years, 4.0% at five, 3.5% at seven and 3.0% at ten for the condo, and roughly half a point higher for the house because of the bigger loan and heavier maintenance. Those are high hurdles at a 7.3% mortgage rate. Refinancing into lower rates improves every scenario; a forced sale in year two or three survives almost none.

When buying clearly wins, when renting clearly wins

Buying clearly wins when you will hold ten-plus years, your rent is at market and rising, you get full use of the deductions, or the alternative is an unstable rental you would pay a premium to escape.

Renting clearly wins when your horizon is under five years, you are rent controlled far below market, the down payment would wipe out your reserves, the only affordable option is a condo with $900 dues and climbing, or the purchase only works at a rate you hope to refinance into.

To run your own numbers, start with real sales near where you rent using the comps tool, since most SF homes sell above asking. Put the true monthly cost next to the rent you would pay for the same thing, add transaction costs, and test 0%, 3% and 5% appreciation at your real hold period. A close call goes to flexibility.

This site is paid through the buyer-side commission only if you later choose to work with one of its agents; the math here is the same either way.