San Francisco's price-to-rent ratio sits at an eye-watering 27-28:1 in 2025, among the highest in the nation. Understanding this metric is crucial for making smart housing decisions in one of America's most expensive markets. Here's everything you need to know about the price-to-rent ratio and what it means for your rent vs buy decision in San Francisco.
What is the Price-to-Rent Ratio?
The price-to-rent ratio is a simple but powerful metric that compares home purchase prices to annual rental costs. It helps you quickly assess whether buying or renting is more economical in a given market.
How to Calculate It
Formula: Home Purchase Price ÷ Annual Rent = Price-to-Rent Ratio
Example calculation for San Francisco:
- Home price: $1,400,000
- Comparable monthly rent: $4,500
- Annual rent: $4,500 × 12 = $54,000
- Price-to-rent ratio: $1,400,000 ÷ $54,000 = 25.9
This ratio of 25.9 means you're paying nearly 26 years worth of rent to purchase the property upfront.
Interpreting the Ratio
- Under 15: Buying is typically more economical
- 15-20: Neutral zone, depends on personal factors
- Above 20: Renting is usually more economical
- Above 25: Renting is strongly favored (SF is here)
Why This Ratio Matters
The price-to-rent ratio captures the fundamental economics of housing in a single number. A high ratio (like SF's 27-28) means:
- Homes are expensive relative to what they'd rent for
- It takes longer to recoup your purchase costs
- Opportunity cost of the down payment is higher
- Renting and investing the difference often yields better returns
San Francisco Price-to-Rent Ratio by Neighborhood
San Francisco's ratio varies significantly by neighborhood. Here's a breakdown of 2025 price-to-rent ratios across the city:
Highest Ratio Neighborhoods (Strongly Favor Renting)
Pacific Heights / Presidio Heights
- Median home price: $2.8M-$3.5M
- Comparable rent: $7,500-$9,000/month
- Annual rent: $90K-$108K
- Price-to-rent ratio: 30-32:1
Marina District / Cow Hollow
- Median home price: $2.2M-$2.8M
- Comparable rent: $6,000-$7,500/month
- Annual rent: $72K-$90K
- Price-to-rent ratio: 28-31:1
Noe Valley / Glen Park
- Median home price: $2.0M-$2.5M
- Comparable rent: $5,500-$6,800/month
- Annual rent: $66K-$82K
- Price-to-rent ratio: 27-30:1
Moderate Ratio Neighborhoods (Still Favor Renting)
Mission District
- Median home price: $1.3M-$1.6M
- Comparable rent: $4,800-$6,000/month
- Annual rent: $58K-$72K
- Price-to-rent ratio: 22-25:1
Inner Richmond / Inner Sunset
- Median home price: $1.4M-$1.8M
- Comparable rent: $4,500-$5,500/month
- Annual rent: $54K-$66K
- Price-to-rent ratio: 24-27:1
Lowest Ratio Neighborhoods (More Favorable for Buying)
Outer Sunset / Outer Richmond
- Median home price: $1.1M-$1.4M
- Comparable rent: $4,000-$5,000/month
- Annual rent: $48K-$60K
- Price-to-rent ratio: 22-23:1
Excelsior / Outer Mission
- Median home price: $950K-$1.2M
- Comparable rent: $3,800-$4,500/month
- Annual rent: $46K-$54K
- Price-to-rent ratio: 21-22:1
Key insight: Even San Francisco's "best" neighborhoods for buying (Outer Sunset, Excelsior) have ratios above 20, indicating renting remains more economical than most US markets. Only if you plan to stay 12-15+ years does buying make financial sense.
When the Price-to-Rent Ratio Favors Renting
San Francisco's 27-28 average ratio strongly favors renting in most scenarios. Here's why:
Financial Analysis: $1.4M Home vs $4,500/Month Rent
Let's examine a typical Mission District scenario with a 25.9 price-to-rent ratio:
Buying costs:
- Purchase price: $1,400,000
- Down payment (20%): $280,000
- Loan amount: $1,120,000
- Monthly mortgage (6.5%): $7,077
- Property tax (1.2%): $1,400/month
- Insurance: $200/month
- Maintenance (1.5%): $1,750/month
- Total monthly cost: $10,427
Renting costs:
- Monthly rent: $4,500
- Renters insurance: $30
- Total monthly cost: $4,530
Monthly difference: $5,897
Annual difference: $70,764
Opportunity Cost of Down Payment
The $280,000 down payment invested in index funds historically returns 8-10% annually:
- Conservative 7% return: $19,600/year
- Market average 9% return: $25,200/year
Adding monthly savings ($5,897 × 12 = $70,764) plus investment returns ($25,200) gives you $95,964 in annual advantage by renting and investing.
Breakeven Timeline
With SF's high ratio, you need to stay approximately 12-15 years before buying becomes cheaper than renting, assuming:
- Home appreciation: 2-3% annually (SF's long-term average)
- Rent increases: 3% annually
- You can invest the savings at 7-9% returns
If you're uncertain about staying 15+ years, the high price-to-rent ratio strongly favors renting.
When the Price-to-Rent Ratio Favors Buying
Despite SF's unfavorable ratio, buying can still make sense in specific scenarios:
Long Time Horizon (15+ Years)
If you're certain about staying in San Francisco for 15+ years:
- You'll eventually reach breakeven point
- Fixed mortgage payment hedges against rent increases
- Build significant equity through principal paydown
- Benefit from long-term appreciation (2-3% compounds)
Substantial Equity from Previous Home
If you can make a 30-40% down payment:
- Lower monthly mortgage payment
- Avoid PMI
- Better interest rates
- Opportunity cost of down payment matters less
Example with 35% down ($490K on $1.4M home):
- Loan amount: $910,000
- Monthly mortgage: $5,751 (vs $7,077 with 20% down)
- Total monthly cost: $9,101 (vs $10,427)
- Difference vs renting: $4,571 (vs $5,897)
Breakeven drops to 10-12 years with larger down payment.
Non-Financial Factors
Sometimes buying makes sense even with an unfavorable ratio:
- Stability: No landlord can make you move
- Customization: Renovate without permission
- Schools: Guaranteed access to specific school district
- Family roots: Building generational wealth
- Rent control bypass: Your "rent" (mortgage) never increases
Lower-Ratio Neighborhoods
Outer Sunset and Excelsior (21-23 ratios) reach breakeven faster:
- More affordable entry points ($950K-$1.1M)
- Lower monthly ownership costs
- Breakeven in 9-12 years vs 12-15 years elsewhere
- Still access to SF amenities and job market
Comparing SF's Ratio to Other Major Markets
San Francisco's price-to-rent ratio is among the highest in the nation. Here's how it compares:
West Coast Markets
- San Francisco: 27-28 (extremely high)
- San Jose: 26-27 (similar to SF)
- Los Angeles: 22-24 (high)
- San Diego: 21-23 (high)
- Seattle: 19-22 (moderate-high)
- Portland: 18-20 (moderate)
Other Major Markets
- New York City: 24-26 (very high)
- Boston: 20-22 (high)
- Miami: 18-20 (moderate)
- Austin: 16-18 (neutral)
- Denver: 16-18 (neutral)
- Phoenix: 14-16 (buying favorable)
- Atlanta: 12-14 (buying favorable)
Key takeaway: Only NYC rivals San Francisco's extreme price-to-rent ratio. Most other markets have ratios 30-50% lower, making buying relatively more attractive elsewhere.
How to Use Price-to-Rent Ratio in Your Decision
- Calculate the ratio for your target property. Find comparable rentals in the same SF neighborhood using Zillow or Apartments.com. Use actual listings, not estimates.
- Research neighborhood-specific data. Use the neighborhood breakdowns above, but verify with current 2025 listings. Ratios can shift as market conditions change.
- Factor in all ownership costs. Don't just compare rent to mortgage. Include property tax (1.2% in SF), insurance ($150-250/month), HOA if applicable ($400-1200/month), and maintenance (1.5% annually).
- Determine your timeline honestly. If you're uncertain about staying 12-15+ years, the high ratio strongly favors renting. Don't let FOMO drive a bad financial decision.
- Calculate opportunity cost. What could you earn investing the down payment and monthly savings? Use our rent vs buy calculator to model this.
- Consider non-financial factors. Stability, school access, customization, and family roots have value beyond the ratio. Assign dollar values to these if they matter to you.
Calculate Your SF Breakeven Point
Use our calculators to model your specific San Francisco scenario with actual prices and rent.
Rent vs Buy Calculator Home Affordability CalculatorFrequently Asked Questions
What is a good price-to-rent ratio?
A price-to-rent ratio under 15 favors buying, 15-20 is neutral territory, and above 20 favors renting. San Francisco's average ratio of 25-30 is among the highest in the nation, strongly suggesting renting is more economical for most residents. The ratio divides home price by annual rent: a $1.5M home renting for $5,000/month ($60K/year) has a ratio of 25, meaning you'd pay 25 years of rent to buy the property.
What is San Francisco's price-to-rent ratio in 2025?
San Francisco's price-to-rent ratio in 2025 ranges from 22:1 to 32:1 depending on neighborhood. The city-wide average is approximately 27-28:1, meaning median home prices are 27-28 times higher than annual rent. This is significantly above the 15-20 neutral range, indicating San Francisco strongly favors renting over buying from a pure financial perspective. Only neighborhoods like Outer Sunset (22:1) and Excelsior (21:1) approach reasonable buying territory.
How does SF's price-to-rent ratio compare to other cities?
San Francisco's 27-28 price-to-rent ratio is among the highest in the US. Comparisons: San Francisco (27-28), New York City (24-26), Los Angeles (22-24), Seattle (19-22), Austin (16-18), Phoenix (14-16), Atlanta (12-14). Only NYC rivals SF's extreme ratio. This explains why San Francisco has one of the lowest homeownership rates in the nation - the math simply doesn't work for most buyers unless they plan to stay 15+ years or receive substantial windfalls.
When does buying make sense in San Francisco despite the high ratio?
Buying in San Francisco makes sense when: 1) You plan to stay 15+ years minimum, 2) You have substantial equity from previous home (can afford 30-40% down), 3) Your income is high enough that mortgage interest deduction matters significantly, 4) You're buying in a lower-ratio neighborhood like Outer Sunset (22:1) or Excelsior (21:1), 5) You value stability and aren't concerned with maximizing financial returns, 6) You expect significant life events (marriage, kids) making moving disruptive. Even with a 28:1 ratio, long time horizons and non-financial factors can justify buying.
How do I calculate price-to-rent ratio for a specific SF property?
To calculate price-to-rent ratio: 1) Find the home purchase price (e.g., $1,400,000), 2) Research comparable rental prices for similar properties in the same SF neighborhood (e.g., $4,500/month), 3) Multiply monthly rent by 12 to get annual rent ($4,500 × 12 = $54,000), 4) Divide purchase price by annual rent ($1,400,000 ÷ $54,000 = 25.9), 5) The result (25.9) is your price-to-rent ratio. Above 20 suggests renting is more economical, especially for SF properties.