As we approach the end of November, there has been an increase in new home construction and builder confidence, while rates remain low and unemployment claims start to rise.
Summary: Seattle mortgage rates have been on a gradual decline over 2019, but they’re currently holding steady. This article will outline where rates are today and how that may impact homebuying.
The U.S. economy is showing some signs of strengthening, fueled by a renewed consumer optimism and increased consumer spending.
As reported by the Census Bureau, retail sales were up 0.3% in November 2019 from the month before, and 3.1% higher than the same time in 2018. Non-store retailers were up 11.5% from last November, and food services and drinking establishments were up 5.1% from last year.
According to a recent report from the University of Michigan, consumer sentiment has strengthened over the past couple of months. Coupled with strong employment news in November, an increase in consumer confidence may ease some concerns about the short-term outlook of the economy. Consumer confidence and spending is the backbone of the economy, and signs that consumer spending is positive could be a sign of a stronger economy.
The latest activity from the Federal Reserve in terms of cutting rates or leaving them as is plays a role in consumer spending and confidence, as borrowing and leveraging funds is more affordable. And that includes mortgages.
With rates hovering near historic lows for an extended period of time, buying a home in Seattle is more affordable, particularly as prices in the city have dipped over the past 12 months.
The connection between Retail Sales and home affordability is indirect, but noteworthy — especially given today’s broader market conditions.
But the national housing market across the nation has been a hot one lately, with home prices having gone up 3.8% over the last 12 months, according to real estate research firm Zillow. Prices are still expected to increase throughout 2020, albeit at a slower pace. That said, housing is still out of reach for many Americans, despite the lower interest rates on mortgages that we have been seeing over the recent past.
Seattle Housing Market Cool, But Still Expensive
Seattle’s home prices are among the highest in the country, which has made it difficult for many buyers to get into this particular market. Even though the market in Seattle has cooled somewhat over recent months and prices have dipped, the average price for a home in Seattle is still more expensive than most other markets in the nation.
However, with mortgage rates as low as they still are, housing affordability is a bit better in Seattle today that it was over a year earlier.
But there are plenty of other options for buyers when it comes to buying a home. If Seattle is too expensive, there are plenty of other centers close by that offer much more affordable home prices, including Federal Way, Tacoma, and Lakewood. In fact these particular cities are experiencing a hot real estate market as more and more buyers flock to centers like these because of their lower prices while still being within close proximity to Seattle.
Low Mortgage Rates Make Buying a Home More Affordable
While Seattle may be offering slightly lower prices compared to where they were only a few months ago, there are many other places around the city that may offer more affordable prices. That, coupled with low mortgage rates, makes homebuying potentially affordable for many buyers. Considering how low rates are today, now may be a great time to buy.
Have Questions About Mortgages?
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.