Do you plan to buy your first home in Washington in 2019? If so, there are some things you should know about recent mortgage and housing trends. Understanding the current “lay of the land” can improve your chance for success.
To that end, here are five things first-time home buyers in Washington should know in 2019.
1. Home prices have slowed but are still rising.
A couple of years ago, home prices in Washington were rising faster than any other state in the country. Washington led the way in terms of annual price growth, posting double-digit gains from one year to the next.
But things have slowed down a bit since then. According to the latest research by Zillow, the statewide median home value was around $375,000 as of November 2018. That was an increase of around 8% from the same month a year earlier. So while Washington State continues to outpace the nation, the real estate market is “cooling” a bit.
Looking forward, housing analysts have predicted that home prices across the state will most likely continue to rise throughout 2019.
The key takeaway here is that first-time buyers who put off their purchases until later in 2019 could encounter higher prices and reduced affordability.
2. Housing inventory market is growing, finally.
Inventory shortages were the big real estate news story of the last couple of years. Many cities across the country were experiencing a shortage of homes for sale, relative to the number of buyers in the market. Shortages were particularly severe in major cities across the Pacific Northwest, including those in Washington.
Thankfully, we are finally starting to see some inventory growth in cities across Washington. This growth trend is most noticeable within the Seattle metro area, which has long suffered from severe inventory shortages.
This is good news for first-time home buyers in Washington, especially those entering the real estate market in 2019. It means they’ll have more properties to choose from, compared to those who purchased during the worst of the shortage. It could also help ease competition among buyers going forward.
3. Mortgage rates have leveled off, but they could inch upward during 2019.
Mortgage rates rose steadily during the first half of 2018, but have since leveled off a bit. Over the last few weeks, the average rate for a 30-year fixed home loan has been hovering in the 4.8% – 4.9% range.
As far as forecasts go, a couple of industry organizations recently predicted that 30-year mortgage rates would average around 5.1% during 2019. So they could climb a bit over the coming months, especially if the economy keeps firing on all cylinders.
4. Mortgage loans are more flexible today than in the past.
A recent report from CoreLogic showed that: “Mortgage credit underwriting eased for both conventional and Federal Housing Administration (FHA) home-purchase loans during the Q2 2018 compared with a year earlier.” Another report showed that home loan denial rates have declined steadily for the last seven years.
Both of these trends point to a mortgage industry that has become more flexible. It also underscores the importance of speaking to a knowledgeable loan officer about the many financing options that are available. Please contact us if you have any mortgage-related questions, or if you’d like receive a quote on your next loan.
5. Getting pre-approved for a home loan could increase your chance for success.
In a previous article, we shared a report that showed most first-time buyers in Washington State and nationwide get pre-approved for a mortgage loan before house hunting. It makes sense to start the process in this order, and that’s why so many people do it.
Getting pre-approved for a home loan can help you zero in on a specific price range. This in turn can help you narrow down your housing search and expedite the overall process. Please contact us if you have questions about getting pre-approved for a mortgage loan in 2019.