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Summary: Are you planning a home purchase in Tacoma, Washington in 2020? If so, this is a great place to start your research. In this article, we take a look at current Tacoma real estate market trends, mortgage rates, housing forecasts, and other topics essential to home buyers.
Tacoma is a fabulous place to look for a new home in 2020. In fact, many buyers who would otherwise be unable to afford a home in Seattle often turn to nearby Tacoma for much more affordable home prices.
Tacoma is close enough to Seattle to commute to and from every day, but its home prices are a lot easier for buyers to digest and fit into their budgets. Perhaps it’s this reason why Tacoma is currently experiencing a very hot real estate market right now.
Related: Free Home Buyers Guide eBook
Is it a Good Time to Buy a Home in Tacoma in 2020?
With 2020 in full swing, many home buyers are looking ahead to the coming month, particularly when it comes to buying a home in Washington State. And many are asking the same question: Is 2020 a good time to buy a home in Tacoma?
Perhaps a better question would be; how much might it cost you if you wait? Home prices in Tacoma are expected to rise quite a bit through 2020, just as they did in 2019. According to the Seattle Times, Tacoma is one of the hottest markets in the country. With a limited inventory of only 0.87 months in overall Pierce County and housing prices rapidly increasing, if you buy a home in Tacoma later in 2020 as opposed to earlier, you’ll probably pay more.
Another crucial consideration is your personal finances. Make sure buying a home in Tacoma Washington is the right move based on your lifestyle and current financial position. Do you have a steady income? Do you expect that to continue uninterrupted for the foreseeable future? Are your current monthly expenses manageable? Do you plan to live in the area for at least the next few years? If you answered yes to these questions, buying a home in Tacoma may be a smart move.
What’s the Local Real Estate Market Like?
Tacoma’s real estate market is very competitive right now, partly due to an inventory shortage of homes for sale. According to Zillow, Tacoma is one of the hottest housing markets in the nation right now. The real estate company says that housing prices increased 7.3% over the past 12 months, and are expected to increase by another 4.9% over the next year. Many homes sell within days of being listed, and the typical home found a buyer in just eight days.
That might sound overwhelming and even scary for buyers, especially first-timers who are new to the real estate market. But even in a tight real estate market like Tacoma, Washington, there are several things you can do to increase your chances for success, and financing is a big part of it. If you’re thinking about buying a home in Tacoma in 2020, make sure you have your finances in order before you enter the real estate market.
For cash buyers, this means having the money in the bank, with bank statements to prove it. Home buyers using a mortgage loan can benefit from getting pre-approval by a mortgage lender. In a competitive market like Tacoma, sellers will want to know that you have your financing squared away.
As for home prices, housing analysts expect Tacoma’s real estate market to continue outpacing. According to Zillow, house values in the city rose by 9.2% in the past 12 months. Looking forward, they’ve predicted a gain of another 4.9% in 2019.
What Are Mortgage Rates Doing?
Mortgage rates have been dropping over the past year. You can see this trend at the very left side of the chart below. They’ve been on a steady decline, with only the odd upward tick here and there. Right now (as of the second week of February 2020), rates for a 30-year fixed-rate mortgage are 3.45%.
Looking forward, analysts with both the Mortgage Bankers Association and Freddie Mac expect interest rates to remain steady throughout 2020 and stay under the 4.0% mark.
This outlook, combined with the forecast for rising home prices, has created the perfect time for home buyers in Tacoma and across the Seattle metro area to get into the market. In short, those who buy today can take advantage of low rates before prices continue to take off, while those who postpone their purchases until later in 2020 could end up paying more for a home. So there’s a lot to consider.
Good News: Higher Loan Loan Limits in Tacoma
Federal housing officials recently announced they would increase both FHA and conforming (conventional) loan limits for 2020. This is in response to significant home-price gains that occurred during 2019.
In 2020, the loan limit for a single-family home purchase in Tacoma is $741,750. This applies to both FHA-insured and conventional mortgage loans.
To be clear, borrowers can still obtain financing above these limits. It would just require a “jumbo” mortgage, and that often means a larger down payment as well.
Right now, the median home price for Tacoma is around $337,900. This means home buyers should have plenty of properties to choose from, well within the FHA and conforming loan limits stated above.
Need a Home Loan?
Will you need a mortgage loan when buying a home in Tacoma? We can help. Sammamish Mortgage has been serving buyers across the Pacific Northwest for more than 25 years, including Colorado, Idaho, and Oregon. We are a local, family-owned mortgage company based in Bellevue, Washington providing many mortgage programs to clients. Please contact us with any financing questions you have. We look forward to hearing from you.