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A recent report from the government-sponsored mortgage buyer Freddie Mac brought good news for home buyers across Washington. Mortgage rates continued to trend downward last week, after climbing to a 15-year peak toward the end of last year.
This downward trend could help improve affordability for home buyers in cities throughout Washington State. Here’s what you need to know about these recent mortgage rate trends, and how they might affect you when buying a home later this year.
Mortgage rates rose substantially during the second half of 2022 and into 2023. This in turn led to a cooling trend in real estate markets all across the country, including those right here in the state of Washington.
During 2022, the average rate for a 30-year fixed mortgage loan rose from the low 3% range to a 15-year high of 7.79% by late October of 2023. Rates more than doubled in less than a year, catching come borrowers off guard.
The good news for Washington home buyers is that mortgage rates have declined steadily since hitting that October peak. Home loans are more affordable now than they were at the end of last year, and this trend could continue over the coming months.
According to a report published on January 24, 2024, the average rate for a 30-year fixed mortgage loan fell to 6.6% — the lowest level in many months. And it’s worth mentioning here that the 30-year fixed is the most popular mortgage option among home buyers in Washington State, by far. That’s why we hear so much about it in the news.
So how does this trend affect home buyers? Among other things, it will increase affordability for many of those who plan to take out a mortgage loan in the near future. In fact, these recent trends could give thousands of home buyers across Washington State greater purchasing power over the coming weeks and months.
According to the economic research team at Freddie Mac, the lower mortgage rates mentioned above could benefit millions of home buyers nationwide in early 2024. They estimated that an additional three million mortgage shoppers could now qualify for a median-priced home, compared to before the recent rate decline.
“Mortgage rates decreased this week, reaching their lowest level since May of 2023. This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability. However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
Here in Washington, tens of thousands of home buyers who couldn’t afford to make a purchase just a few weeks ago might now be able to do so. That’s why we are working hard to highlight these recent trends. It’s a pretty big deal, from a buyer’s perspective!
Over the past couple of years, home buyers in Washington have felt the pressure of rapidly rising house values. The real estate market accelerated to a fevered pitch during 2021, and into the first part of 2022. This caused home prices across the state to climb like never before.
But we are seeing some moderation in this area, as well.
According to Zillow, the median home price in Washington state was around $562,290 at the start of 2024. While prices rose year-over-year, we are they are showing signs of leveling off when measured month by month. This is more good news for homebuyers, because it relieves some of the urgency around the house hunting process.
It’s important to note that the mortgage rates mentioned above represent averages, based on the weekly survey conducted by Freddie Mac. The actual rates offered to individual home buyers can vary due to a number of factors. Credit scores, down payments, and the type of home loan being used can all affect a person’s mortgage rate.
Do you need mortgage financing? We can help. Sammamish Mortgage has been helping borrowers across the Pacific Northwest since 1992, including Washington State, Colorado, Idaho, and Oregon. We offer many different mortgage programs with flexible qualification requirements to suit the needs of each borrower, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Contact us today if you have questions about applying for a mortgage.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.