Seattle home buyers got some good news this week, as mortgage rates dipped for the second week in a row. The average 30-year loan rate fell to 4.12% during the week ending on January 12, 2017. That was down from two-year high of 4.32% reached during the last week of December.
This latest downtrend comes on the heels of a rate spike that occurred during the last two months of 2016, which we’ve covered here. It’s another sign that Seattle-area mortgage rates might be leveling off, as we head further into 2017.
Mortgage Rates Drop Again, in January 2017
According to the latest survey by Freddie Mac, the average rate for a 30-year fixed mortgage dropped again this week. Thirty-year rates declined by eight basis points (0.8%) during the week ending on January 12, to land at 4.12%.
Average rates for the 15-year fixed mortgage and the 5/1 hybrid ARM loan also dropped this week. This is good news for Seattle home buyers who plan to lock in a mortgage rate in the near future.
According to a Freddie Mac news release that accompanied the latest results:
“After absorbing a mixed December jobs report; the 10-year Treasury yield fell 8 basis points. The 30-year mortgage rate moved in tandem with Treasury yields falling 8 basis points to 4.12 percent, the second decline since the presidential election.”
During the first week of November 2016, mortgage rates began to rise steadily in response to market fluctuations and the Federal Reserve’s decision to raise the short-term federal funds rate. Average rates rose for nine weeks in a row, creating a sense of urgency among Seattle home buyers.
January brought a reversal of this upward trend. During the first and second week of January 2017, the average rate for a 30-year fixed mortgage loan declined.
Economists and housing analysts still expect rates to rise gradually during 2017. But the recent downturn is a positive sign for home buyers, because it’s a sign that rates might begin to fluctuate and “hover” over the coming weeks, instead of rising steadily. But this is just an educated guess.
Seattle Home Prices Still on the Rise
Though mortgage rates have eased a bit, Seattle home buyers still need to keep a close eye on the housing market. Home prices across the metro area continue to rise at a steady pace. So a strong case could be made for buying sooner rather than later.
Seattle, Washington experienced one of the largest home-price gains during 2017, of any major city in the U.S. According to multiple sources, house values in the city rose rose by double digits during 2016. Zillow reported a one-year gain of 13.3%, one of the highest in the nation.
The median home price in the city is now reported to be north of $600,00. Across King County, the median price is now above $500,000, according to the Northwest Multiple Listing Service.
Home-price appreciation is expected to slow down during 2017, but it will likely continue to some degree.
So while the slowdown in mortgage rates is good news for Seattle home buyers, a sense of urgency is still warranted. If prices continue to move north, as they are expected to do, home buyers who delay their purchases until later this year could end up paying more for a house.