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Seattle-Area Home Loan Rates Drop Again, Heading Into October 2016

At the beginning of August, we reported that Seattle home loan rates were hovering in the low 3.4% range, on average. So call this déjà vu. After rising to around 3.5% in the middle of September, the average rate for a 30-year fixed mortgage has once again dropped down into the 3.4% range. This is based on the latest industry survey conducted by Freddie Mac.

Here’s a look at current Seattle home loan rates, at the start of October 2016, along with a new forecast from the Mortgage Bankers Association.

Seattle Home Loan Rates Hovering Below 3.5%, Again

On Thursday, Freddie Mac published the results of its latest nationwide survey of the mortgage industry. According to that report, the average rate for a 30-year fixed mortgage loan was 3.42% for the week. That was a slight decline from the previous week’s average of 3.48%. Borrowers paid an average of half a point at closing.

Home loan rates in Seattle, and elsewhere across the country, are actually lower now than they were at the start of last October. During the first week of October 2015, the average rate for a 30-year mortgage was 3.85%. At the start of October 2016, it’s hovering in the 3.4% range — more than 40 basis points lower than this time last year.

According to the latest Freddie Mac survey:

“Investors flocked to the safety of government bonds causing the 10-year Treasury yield to continue its descent following the FOMC’s decision to leave rates unchanged. The 30-year fixed-rate mortgage responded by dropping 6 basis points before landing at 3.42 percent–a ten-week low.”

The FOMC mentioned above is the Federal Open Market Committee, which is the group that determines the Federal Reserve’s monetary policy. At its latest meeting in September, the FOMC decided to “maintain the target range for the federal funds rate at 1/4 to 1/2 percent.” The Fed’s policies, along with other economic factors, have helped keep Seattle home loan rates low for months.

See Today’s Seattle Mortgage Rates In Seconds

The Latest Mortgage Chart Says it All

The chart below, courtesy of Freddie Mac, shows mortgage rate trends going back 12 months. As you can see, the average rate for a 30-year fixed home loan (shown in blue) has dropped considerably since this time last year, and also since the start of 2016.

Rate chart, Sept 29

Mortgage rate trends. Source: Freddie Mac. Click to enlarge.

Another interesting trend is that, in recent weeks, the average rate for a 15-year fixed mortgage (green line) has been trending below the average for a 5/1 adjustable-rate mortgage. This is somewhat unusual. Historically speaking, the 5-year ARM tends to be lower than the average rate for a 15-year fixed home loan. This trend is noteworthy for Seattle homeowners, in particular, since they often refinance into 15-year loans to shorten their mortgage term.

The bottom line is that there are some great deals to be had, for qualified borrowers.

A Good Time to Buy or Refinance a Home in Seattle

This latest report brings good news for home buyers and homeowners alike. Home buyers can benefit by obtaining low rates on a purchase loan, which helps to offset rising home values in the Seattle metro area. Additionally, many homeowners are now in a good position to refinance their existing mortgage loans to save money over the long term.

Related: Seattle home prices still rising

Refinancing activity rose in 2016 compared to last year. This is largely the result of low mortgage rates and home-price gains across the country. In its latest forecast report from September 2016, the Mortgage Bankers Association pointed out:

“With still‐low mortgage rates and a generally healthier home equity picture in the housing market, our current estimate of refinance origination volume for 2016 is $857 billion compared to $749 billion in 2015, a 14 percent increase over the year.”

Today’s Seattle Rates

MBA Forecast: Rising Rates Ahead?

Speaking of forecasts, the Mortgage Bankers Association recently predicted that the average rate for a 30-year year home loan could reach 3.7% by the end of 2016. They expect it to continue rising through 2017 as well.

Here is their latest forecast for 30-year mortgage rates, issued in September:

  • Q1 2017: 3.9%
  • Q2 2017: 4.1%
  • Q3 2017: 4.3%
  • Q4 2017: 4.4%

Need a loan? Mortgage rates have been hovering below 3.5%, on average, for weeks now. But there’s no telling how long they’ll stay that low. If you’re planning to buy or refinance a home in Seattle, please contact one of our award winning Loan Officers at 425-401-8787. We have proudly served the Pacific Northwest for over 20 years, and we welcome the opportunity to help you as well.

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