SEATTLE — Washingtonians looking to buy homes may see a more amenable market than earlier in 2022, but they’ll also face the expense of 30-year fixed mortgage rates at a 14-year-high.
Some experts say rising mortgage rates have reduced the number of buyers battling for a limited supply of homes, increasing negotiating power for those who remain. In some cases, it has meant lower prices on homes as compared to earlier this year.
“We were one of the hottest real estate markets in the entire country and the entire nation was experiencing this crazy frenzy,” Zach McDonald, a real estate agent and managing broker at Real Property Associates said. “Buyers paying, in our market, 15, 20, 25, even more percent above asking price.”
As inflation rose and mortgage rates lifted, many buyers left the market. Freddie Mac said this week that mortgage rates continued to rise and exceeded six percent for the first time since 2008.
“Although the increase in rates will continue to demand and put downward pressure on home prices, inventory remains in adequate,” the agency wrote in a press release. “This indicates that while home price declines will likely continue, they should not be large.”
Now, there are signs things are starting to stabilize. A recent report by the Northwest Multiple Listing Service says data showed a more “typical August,” with a return to “normalized conditions.”
“Buyers had this fear of missing out; oh my gosh, I might never be able to buy a house, and then they went into this spot of, what if I buy a house right now? What are the bad things that are going to happen to me?” McDonald said. “Both were driven by fear and I think now we're in this spot where buyers and sellers have recalibrated, sellers don't think they're going to sell for twenty-five percent over asking price, buyers have accepted they're gonna’ have a larger mortgage payment for the moment.”