With mortgage rates at their lowest point of the year, and the possibility for continued home-price appreciation over the coming months, is now the best time to buy a house in Washington State?
Is It the Best Time to Buy a House in Washington?
If you live in Washington and have been considering the purchase of a home, you probably already know that house values are on the rise. That’s been the big news story of the last couple of years. Home prices across Washington State have risen steadily, with double-digit gains in some cities during the last 12 months alone.
But mortgage rates recently dropped to their lowest point of the year, which will likely attract more buyers into the real estate market. When you combine this with the prospect of rising house prices, an argument could be made that now is the best time to buy a house in Washington.
Home Prices Still Rising Due to Scant Inventory
In August, the Washington Center for Real Estate Research at UW reported that home values across the state were still rising steadily.
According to that report:
“The statewide median sales price rose to $337,700 in the second quarter, 6.6 percent higher than the same time period last year. This represents an all-time high for statewide house prices and the highest median price ever recorded in Washington state.”
This is the result of high demand and limited inventory, and these conditions will probably continue to put upward pressure on home prices through 2017 and into 2018.
So, for those would-be home buyers who are on the fence about making a purchase, now might be the best time to buy a house in Washington. Delaying your purchase plans could reduce your buying power, as prices continue to climb.
Mortgage Rates Hit a Year-To-Date Low in September
The prospect of continued home-price appreciation, in and of itself, is a pretty good reason to buy sooner rather than later. And recent mortgage rate trends give buyers yet another reason to move forward.
On September 7, Freddie Mac published the latest results of its weekly survey of the mortgage industry. And the news was good for home buyers shopping for a mortgage loan.
The average rate for a 30-year fixed home loan dropped to its lowest point of the year this week, landing at 3.78%. Freddie Mac published the chart below on September 7. It shows average mortgage rates across three different loan categories going back a year or so.
As you can see, we are currently seeing some of the lowest rates of the last year. You would have to go all the way back to November 2016 to find lower rates.
Homeowners Can Escape the Rising Rent Cycle
Rent prices across Washington State have risen steadily, putting the squeeze on renters and stretching their budgets. Earlier this year, Tacoma was reported as having one of the highest year-over-year increases in rent prices among cities nationwide. But this trend is visible across the entire state.
While home prices in Washington have also risen, there are some clear advantages to buying a house versus renting.
For one thing, you have more control over your monthly housing costs. A home buyer in Washington can choose a fixed-rate mortgage that will carry the same interest rate for the entire repayment term (in most cases). Rents, on the other hand, tend to rise steadily over time.
So, is now the best time to buy a house in Washington?
This is a question you must answer for yourself, through a combination of budgeting and soul-searching. But from a cost perspective, now could be a good time to buy. Mortgage rates are at their lowest point of the year, but we don’t know how long they will stay at that level. And there is a very good chance that home prices in the state will continue to rise.