Summary: If you’ve been contemplating buying a home in Seattle lately, then perhaps 2020 may be the year that you take the leap. There are plenty of reasons why this year may be the time to do it, and this article will outline what those reasons are.
It looks like 2020 could be a great time to buy a home in Seattle. Home prices have dipped over the past year, but they are starting to increase again into 2020. And mortgage rates are expected to remain fairly stable over the coming months. Those are just a few of the trends we are tracking, as we head further into 2020.
1. Mortgage rates are near historic lows.
Mortgage rates shot up during the first part of 2018, catching a lot of Seattle home buyers off guard. But they’ve since leveled out and even declined over recent months, settling into the 3.5% to 4.0% range (on average). As of right now, rates are sitting at 3.47%, which is near a five-decade low.
Rates like these are making homebuying much more affordable. Even a 1.0% decrease in rates can mean savings of tens of thousands of dollars over the life of a mortgage. Many of those who already own a home are refinancing their mortgages in an effort to capitalize on these lower rates and save a ton of money.
In February 2020, Freddie Mac’s economists reported the following:
“With mortgage rates hovering near a five-decade low, refinance application activity is once again surging, rising to the highest level in seven years. This surge coupled with strong purchase activity means that total mortgage demand remains robust, reflective of a solid economic backdrop and a very low mortgage rate environment”
Economists from both Freddie Mac and Fannie Mae have predicted the 30-year mortgage rates will average around 3.8% during 2020. So the expectation is that they will remain relatively stable throughout 2020 and remain under the 4.0% mark. This is reason enough to get into the Seattle real estate market in 2020.
2. The local job market is strong in 2020.
The Seattle metro area currently has a strong and stable job market. This is important for those home buyers who need to use mortgage loans to finance their purchases. A robust economy gives buyers more confidence, by making it easier to find employment.
According to the Bureaus of Labor Statistics, the Seattle-Bellevue-Everett metro area had an unemployment rate of just 2.2% as of December 2019. That was lower than the state average for the same month, and it points to a strong local economy.
With a strong labor force – along with increasing wages – consumer sentiment and spending power is much stronger. And with that comes a better financial position to afford mortgages. That, coupled with low mortgage rates that makes buying a home even more affordable, makes now a great time to invest in a home purchase in Seattle.
3. Home prices are on the rise.
Over recent months, home buyers in Seattle have finally gotten the chance to catch their breath, after the double-digit price growth of previous years. Home prices skyrocketed from 2012 to 2018, giving homeowners the chance to capitalize on quick accumulation of home equity. But over the past 12 months or so, home price actually plateaued and decreased.
This was a much-needed situation for buyers would have been priced out of the market as a result of such rapid price increases. Over the past year, home price sin Seattle dipped 2.3%, according to Zillow.
But the trend is reversing. Zillow now says that prices in Seattle are expected to increase 4.2% over the next year, and will help turn Seattle into a warmer market as a result.
Considering this fact, buyers are encouraged to get into the market before prices start to take off. Getting into the market when prices are in the “valley” is a sound investment strategy and while allow buyers to take advantage of an increase in home equity much faster.
4. Sellers appear to be more motivated and flexible.
Here’s another sign that 2020 might be a good year to buy a home in Seattle. Sellers are more willing to negotiate — and to lower their prices.
Since the market is still considered to be “cool,” sellers may be more inclined to be a little more flexible, which is a good thing for buyers. Granted, Seattle is still not a buyer’s market in the traditional sense. And if Zillow’s predictions are accurate, the market will start to heat up in the coming months, which means now is the time for buyers to make their move.
Need a Home Loan in Seattle?
Will you need mortgage financing to buy a home in Seattle? We can help. Sammamish Mortgage has been serving buyers across the Pacific Northwest for about 28 years. We offer a wide variety of mortgage programs with flexible qualification criteria. Please contact us today with any financing-related questions you have.