Mortgage rates have made headlines this week by sinking to their lowest level in several months. At the same time, housing activity has eased due to the end-of-year holiday season. Opportunity knocks, and savvy home buyers in Washington State will likely take advantage of these conditions.
Mortgage Rates Flat or Dropping, Five Weeks in a Row
Earlier today, Freddie Mac reported the latest results of their long-running survey of the mortgage industry. According to their data, the average rate for a 30-year fixed mortgage loan was 4.63% for the week. It hasn’t been that low since mid-September. That’s good news for home buyers in Washington who are in the market for a home loan.
Interest rates for other mortgage products, such as the 15-year fixed and the 5-year ARM, also dropped during the second week of December.
Freddie Mac’s research team issue the following statement along with their latest results:
“Mortgage rates have either fallen or remained flat for five consecutive weeks and purchase [loan] applicants are responding with an uptick in demand given these lower rates.”
In other words, home buyers and refinancing homeowners are rushing to take advantage of this latest trend.
There are several reasons for this downward trend. The stock market certainly plays a role. Recent turbulence within the stock market has steered many investors toward the relative stability of bonds. And when treasury bond yields go down, mortgage rates tend to drop along with them.
In a recent news report, Realtor.com’s chief economist Danielle Hale stated:
“If people think international trade is going to hurt the economy and U.S. company growth prospects, then they might choose to invest in something safer, like Treasury bonds, and that drives mortgage rates down.”
Industry Forecasts Predict Higher Rates in 2019
The Mortgage Bankers Association (among other groups) recently predicted that 30-year mortgage rates in Washington and nationwide would average around 5.1% during the first quarter of 2019.
Granted, that’s just one prediction. But if it turns out to be right, it means that home buyers in Washington could encounter higher borrowing costs as we move into 2019. That’s why many real estate investors and home buyers will probably attempt to lock in their rates as soon as possible.
You might not be able to “time” the market. But you can certainly take advantage of good conditions when they come along.
Savvy Buyers Could Benefit from Holiday Slowdown
As we mentioned in a recent blog post, home buyers in Washington who purchase over the holidays could get a better deal. That’s based on a study conducted by ATTOM Data Solutions.
Real estate market activity tends to wane during the holiday season, which means there is less competition among buyers. Regardless of where you live, there’s a good chance that your local real estate market will slow down over the next month or two. This factor — combined with today’s relatively low mortgage rates — offers a powerful incentive to home buyers across the state.
And here’s another incentive for those buyers who are “on the fence” about entering the market in 2019. There’s more inventory available these days. A series of reports published over the past few weeks have shown that there are more homes coming onto the market across the state of Washington. This trend is most noticeable in the Seattle area.
The latest report, published in December by a national real estate company, showed that housing inventory is “skyrocketing” in the Seattle metro area. This will ease the fierce competition we’ve seen over last few years, while giving buyers more options to choose from.
So there’s a lot to digest here, and most of it is good news for home buyers. Mortgage rates have dropped, inventory is on the rise, and bidding wars are becoming a rarity. But home values in most Washington cities are still climbing. So in addition to these strong incentives for buyers, there’s also a sense of urgency.