The regional economic indicators are all over the place: Unemployment is low. Borrowing has slowed. Inflation remains stubbornly above target.
“Our members are just feeling the uncertainty of the economic times that we’re in,” said Wade Painter, CEO of Monterra Credit Union. Monterra has 100,000 members from San Mateo, Alameda, Contra Costa, Santa Clara and San Francisco counties. He will have to make sense of the puzzling picture when the credit union’s shareholders convene for their annual meeting on Thursday, May 28.
Monterra is seeing more saving and less borrowing, Painter said, and Redwood City is experiencing a softening in sales tax revenue, according to Amanda Anthony, Redwood City’s economic development manager. Both trends suggest that households are spending more cautiously.
Additionally, delinquencies – past-due payments – are ticking up for mortgages. That’s usually a sign that a household has experienced a job layoff or disruption to their income, said Jennifer Sussman, Monterra’s chief marketing officer.
“If you’ve lost your job, that’s the hardest area to pay, because the bill is just so high here,” Sussman said.
Housing costs remain high. Painter estimates that a household needs a $250,000 total annual income to buy a starter home in the Bay Area for $1 million or $1.5 million. That’s less than the roughly $500,000 per year that a local research organization estimated would be required to buy a home in the area with a median sales price.
“We’re at ground zero for the most unaffordable housing in the country,” Painter said.
With mortgage rates and uncertainty high, mortgage applications have declined. However, applications for second mortgages — additional loans that households take out while paying off their original mortgage – are trending up, Painter said. The trend suggests many homeowners are reluctant to refinance primary mortgages that are locked in at historically low pandemic-era interest rates and are instead turning to additional debt to manage expenses or access cash.
Inflation also remains an issue that is hurting profitability of small businesses, Painter said. Between April 2025 and 2026, prices rose by 3.8% in the San Francisco-Hayward-Oakland metro area, according to the Bureau of Labor Statistics. That’s almost double the Federal Reserve’s target rate of 2%.
At the same time, Redwood City has not seen a broad slowdown in retail and restaurant sectors, according to Anthony. She said the city’s local economy is showing resilience despite a mixed economic picture.
“Businesses are still navigating higher costs, changing consumer habits and broader regional uncertainty,” Anthony said.
“We continue to see healthy leasing activity in shopping centers and downtown, and some downtown restaurant owners have shared that their sales have rebounded to pre-COVID levels,” Anthony said.
The labor market also remains a point of strength. The March unemployment rate was 3.6% in the San Francisco-San Mateo-Redwood City metro area, lower than the 5.2% rate in California and 4.3% in the nation, according to state data.
But job growth has been mostly flat in the metro area since last year, with only 0.3% job growth between March 2025 and 2026. Two categories, leisure and hospitality, as well as private education and healthcare, led the job gains over the last 12 months while government was the largest sector that showed a decline in jobs.
Even with local layoffs at tech companies like Meta, Oracle and Amazon, large tech companies based in the area, including Meta and Nvidia, have reported record profits for the first quarter of the year. Painter said he remains confident in the resilience of the local economy.
“Compared to the rest of the country, we have a more robust, more resilient economic underpinning because of the firms that really drive our economy,” Painter said.