Why Homes Are More Expensive This Year

July 23, 2020
Last updated:
April 6, 2022
In This Article

Homes are more expensive today than they have been over the past few years. There are a few reasons for this, including heavy buyer demand and low inventory.

Buying a home is a big financial investment and likely the most expensive purchase you will ever make. Unlike most other things you buy, a home can provide you with equity and can help you build wealth over time.

Even though home prices are higher these days than they were months earlier, today is still a prime time to buy real estate. In just about every part of the Pacific Northwest – like Seattle – home prices have increased at one point over the recent past. That said, home prices across WA, OR, ID, and CO have increased over the last few years.

Mortgage Interest Rates Still Relatively Low

Over the past few months, mortgage interest rates have been inching up. That said, they are still quite low compared to where they were not long ago. From 2018 to the end of 2020, rates were on a decline, but have been on the up and up from early 2021.  

But because rates are still low, buyers can take advantage of a more affordable mortgage because you pay less interest over the life of your home loan. Since rates are on the rise, buyers may want to consider getting into the market sooner rather than later, as mortgages will continue to get more expensive.

These days, you can get a 30-year fixed-rate mortgage at 3.55%, according to Freddie Mac. Keep in mind that even a 1% difference in rates can mean the difference between tens of thousands of dollars in interest over the life of your loan.

For example, let’s see what the difference would be if you paid 4% versus 5% in interest on a 30-year fixed-rate mortgage of $400,000. If you lock in at 5%, you would have to pay $368,514.58 over the life of your loan. On the other hand, a 4% rate means you would pay $284,746.93 in interest over the 30-year period. That’s a saving of over $83,000!

That’s why it’s helpful to keep tabs on rates and swoop in on the market when rates are low. And working with a reputable mortgage company can help ensure that you get the best rate possible on your home loan.

View Current Mortgage Rates

Get Pre-Approved For a Home Loan

The best way to make sure you’re ready to buy while rates are low is to get pre-approved for a mortgage. Getting pre-approved will give you a chance to get all your finances in order and give your lender a head start on the mortgage approval process.

With all the proper documentation and information on hand, your lender will be able to assess your financial health and determine how much you can afford in a home purchase. Having this number in mind will help you focus only on properties that you can afford without wasting your time looking at homes that you can’t afford. It will also help avoid disappointment.

Once you find the home of your dreams, the final mortgage approval process can move along faster because your lender has already started the process. Unless something in your financial life has changed or the home is appraised lower than what you agreed to pay for it, there should be little reason for your mortgage not to go through.

Team Up With a Mortgage Company in WA, OR, ID, or CO

Interest rates are working in your favor right now, so let’s connect to move your homeownership goals forward today. Sammamish Mortgage is a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, and Oregon. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria and have been doing so since 1992. Please contact us if you have any questions or are ready to start the mortgage application process.

Get an Instant Mortgage Rate Quote Today

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