Published October 18, 2026 in Market Update

Peninsula luxury is still tight, even with rates above 7%

By Brad Bell

Real estate, Peninsula Luxury - $2.5M+

Realtor.com reported that mortgage rates climbed above 7% for the first time since January 2025. Most markets softened. This one did not, at least not by much.

The Real Estate Data Aggregator counted 527 homes sold across Peninsula Luxury in the three months ending August 31, 2026. That is up 7.1% from the same months of 2025. At the same time, homes for sale across the same nine ZIP codes fell to 261, down 0.4% year over year. More sales, less inventory. That is the whole story in two numbers.

Nationally, Realtor.com reported that 20.8% of listings took a price cut in September 2026, the highest share since October 2022. On the Peninsula, sellers are mostly not in that position. Supply is too thin to give buyers that kind of leverage.

Rates are real, and so is the cost

Redfin reported that the weekly average mortgage rate hit 7.4% on October 8, a three-year high. CNBC put the forecast for the fourth quarter of 2026 at 7.4% as well. For a buyer financing $3 million, that is a meaningful monthly number. Redfin also reported that the typical U.S. homebuyer's monthly payment reached $2,777, the highest on record except for the previous week.

Peninsula buyers at these price points often pay cash or put down large amounts. That cushions the rate impact somewhat. But it does not eliminate it, and it does not change what sellers need to know: pricing still has to be honest.

ZIP by ZIP, the market splits

The headline numbers cover nine ZIP codes. They do not move together. Here is what the Real Estate Data Aggregator counted for each one in the three months ending August 31, 2026.

Where it moved fast and where it sat

ZIP 94024 had a median of 9 days on market, according to the Real Estate Data Aggregator. Half the homes there went under contract within two weeks of listing, 62.8% to be exact. ZIP 94027 was nearly as quick at 17 days, with 50% under contract in two weeks, up 30 points from a year before.

ZIP 94028 is the one that moved differently. The Real Estate Data Aggregator showed a median of 42 days on market there, 26 days longer than a year before. Only 26.9% of homes sold above list, down 30.2 points from 2025. Sales volume nearly doubled year over year, up 85.7%, but homes are taking longer to close. That tells you buyers are still coming, just more carefully.

Who is selling above list

Even with rates above 7%, overbids are common in most of these ZIPs. The Real Estate Data Aggregator counted 56.6% of homes in 94306 selling above list, the highest share across the nine. In 94025, it was 53.4%. In 94027, 46.2%. These are not soft numbers.

Supply is not growing fast enough to shift the balance

Nationally, Realtor.com reported active listings topped 1.16 million homes in September 2026. That is a real increase in supply across the country. On the Peninsula, the picture is different. The Real Estate Data Aggregator showed new listings across the nine ZIPs up just 1.9% year over year, to 531. That is barely enough to keep pace with demand.

Months of supply stayed under two months in most ZIPs. ZIP 94027 sat at 1.2 months, down a full 1.2 months from 2025. ZIP 94022 matched that at 1.2 months. ZIP 94025 and 94024 each came in at 1.1 months. These are tight numbers by any standard.

What this means if you are selling

Pricing still matters. ZIP 94028 shows what happens when a home sits: even in a ZIP with rising sales volume, a wrong price means 42 days on market instead of 17. Buyers here are paying attention to value, even when they have the resources to move quickly.

The Federal Housing Finance Agency reported U.S. house prices rose 2.6% from July 2025 to July 2026. On the Peninsula, several ZIPs outpaced that by a wide margin. ZIP 94028 was up 28.4% in median price. ZIP 94027 was up 24.4%. ZIP 94024 was up 19.5%. Those are not national trends. They are local ones, driven by thin supply.

What this means if you are buying

Rates above 7% are real. Redfin put the weekly average at 7.4% as of October 8. That adds to your monthly cost and changes what you can finance. But it has not created much more inventory here, and it has not pushed sellers to cut prices in most of these ZIPs. You are still competing for a short list of homes.

The one ZIP with more breathing room is 94028. Inventory there fell 40.7% year over year, but days on market stretched to 42 and overbids dropped sharply. If that ZIP fits your needs, it is worth a closer look at the numbers.