With only two and a half months left in the year, many home buyers across King County, Washington are already setting their sights on 2018. And many share the same questions: Is it a good time to buy a home in King County? What will the real estate market be like next year?
We’ve created a King County mortgage and home buying guide for 2018, to help you make an informed decision. Here’s an updated look at current mortgage and housing market trends for the county, as of October 2017.
King County Home Prices Rose Sharply in 2017
Is it possible for home prices to rise by $100,000 in a single year? If you live in King County, Washington, the answer is yes. These are certainly unusual times for home-price appreciation, all across the Seattle metro area.
According to the Northwest Multiple Listing Service, the median price paid for a single-family home across King County hit $650,000 in September 2017. That was an increase of roughly $100,000 from the same month a year earlier.
So that’s the first thing you should know, if you’re planning to buy a home in King County in 2018. As a result of steady and significant price growth, buyers across the county will encounter higher housing costs in 2018.
Expect Competition from Other Buyers
King County home buyers should be prepared for fierce competition in 2018, due to a shortage of housing inventory across the county.
Like most of Washington State, the real estate market in King County has suffered from limited supply throughout 2016 and 2017. And these conditions will likely continue into 2018, though we might see a bit more inventory come onto the market.
According to housing experts, a “balanced” real estate market has about five to six months worth of supply. In August 2017, King County, Washington had a meager 0.9-month supply of homes for sale. That’s well below the national average.
Additionally, homes spent a median of just eight days on the market in August, before going under contract. This too is well below the national average.
All of these trends indicate a strong seller’s market. High demand and low inventory have created a highly competitive market for home buyers in King County, Washington, and across the broader Seattle metro area.
Mortgage Requirements Have Eased, but Rates Could Rise
In previous blog posts, we explained that mortgage requirements have eased a bit over the last couple of years. This applies to debt ratios, credit scores, and other criteria used to approve borrowers for home loans.
As a result of these ongoing trends, some home buyers in King County might have an easier time qualifying for a mortgage loan in 2018. This is especially true for borrowers with higher debt levels, marginal credit scores, and/or limited funds for a down payment.
Mortgage rates for King County, Washington have been hovering below 4%, on average, for several weeks now. According to an October 12 report by Freddie Mac, the average rate for a 30-year fixed home loan was 3.91%. So interest rates remain attractive for King County home buyers and mortgage shoppers.
But there is no telling how long they will stay at this low level. The latest forecast from Freddie Mac, published earlier this week, suggests a gradual rise over the coming months. They estimated that 30-year mortgage rates would end up averaging 4.0% for 2017, and would rise to an average of 4.4% during 2018.
The Mortgage Bankers Association issued a similar forecast in September, predicting a gradual rise in rates through the end of this year and into 2018.
So that’s a look at King County housing market and mortgage trends for 2018. If you’d like to learn more about this subject, check out these housing forecasts for the area.