The latest home-price appreciation measurement for the Seattle metro area revealed what many local residents already know. House values in the area are rising fast.
In fact, Seattle had the third-highest rate of appreciation over the last year or so. It was outpaced by only two other metros — Dallas, Texas (#2) and Portland, Oregon (#1).
The rankings were compiled by the real estate information company Zillow and based on median home values. The company looked at appreciation trends in metro areas across the nation. Home-price appreciation in Seattle was found to be in the double digits over the last 12 months.
Seattle Home-Price Appreciation Trends in 2016
According to the report, home prices in the Seattle metro area rose by a whopping 11.3% in September, compared to the same month last year. That earned it the #3 spot in a national ranking of home value appreciation.
The median price for the metro area was around $400,000 at the time this article was published. The median within the city itself was just north of $600,000, according to the Northwest Multiple Listing Service.
But the Seattle housing market, while still considered to be very hot, could be at the start of a cooling trend. Zillow’s chief economist Svenja Gudell noted as much in her recent report:
“… it’s still tough out there for buyers, especially in Western markets like Seattle, Denver and Portland that have strong job growth. Things won’t switch from a sellers’ market to a buyers’ market overnight, but conditions are starting to improve.”
Going forward, inventory growth could help create a more balanced housing market in Seattle, leading to smaller home-price gains in 2017.
Across the country, the rate of income growth is catching up to home-price appreciation. Over the past few years, house values had risen faster than income in most parts of the country. But that is now starting to change. For the first time since 2011, incomes have been appreciating faster than home values. This could enable more home buyers to enter the market over the coming months.
Is It Time to Refinance?
Rising house values produce a corresponding rise in home equity. In short, when your home’s value increases, your equity position improves as well. Seattle homeowners who experience equity growth are often in a good position to refinance, especially when current mortgage rates are lower than when they purchased the home.
Related: A good time to refi in Seattle?
According to the latest market survey by Freddie Mac, the average rate for a 30-year fixed home loan was 3.48% for the week ending September 22, 2016. During the same week two years ago, the average 30-year loan rate was at 4.20%.
Lower mortgage rates alone do not automatically mean that refinancing will work out for you. There’s a bit of math involved to reach that answer. You’ll want to determine (A) how much you could save per month after refinancing, and (B) how much your closing costs would be. Using these numbers you can calculate your “break-even” point, which is the point at which your savings begin to surpass your refinancing costs.
The bottom line is that home-price appreciation in Seattle has been significant in recent years. Mortgage rates, meanwhile, continue to hover at or below 3.5% on average. This means many homeowners in the Seattle metro area are now in a good position to refinance their homes.
Is it time to refi? Every loan scenario is different. You have to analyze your own financial situation to determine if refinancing will work to your advantage. We can help you run the numbers to find out if refinancing makes sense for you. Contact one of our friendly and knowledgeable staff members today to get started.