Seattle Mortgage Rates Keep Rising, as We Approach 2017

Back in November, mortgage rates began an upward climb that is still ongoing. Seattle mortgage rates have now reached their highest point of the year, following several weeks of consecutive increases.

So it appears that Seattle home buyers won’t get any Christmas gifts this year, at least where mortgage rates are concerned.

Seattle Mortgage Trends in December 2017

On December 22, 2016, Freddie Mac announced the latest results of its weekly survey of the mortgage market. The long-running survey goes out to about 125 lenders nationwide, including the Seattle metro area. The survey includes a variety of lenders — credit unions, commercial banks, mortgage companies, etc. — so it’s a pretty good indicator of what’s happening across the board.

Read: top 3 Seattle real estate predictions

According to the latest survey, the average rate for a 30-year fixed home loan rose to 4.30% during the week ending on December 22, 2016. That was the highest it has been since 2014.

Bear in mind this is an average of rates assigned by lenders across the industry. Individual rates vary widely based on the type of loan being used, the borrower’s credit score, and other factors.

The chart below, courtesy of Freddie Mac, shows the end-of-year surge clearly.

Rate chart December 22

Average mortgage rates in 2016. Source: Freddie Mac PMMS.

As you can see, mortgage rates in all three of the loan categories tracked by Freddie Mac are higher now than they were at the beginning of the year. In fact, the average rate for a 30-year loan is at its highest point since April 2014.

The rise in rates is partly due to the Federal Reserve’s changes in monetary policy. After its last meeting, on December 13 – 14, the Federal Open Market Committee announced it would increase the short-term federal funds rate from 1/2 to 3/4 percent.

While Fed policy doesn’t influence Seattle mortgage rates directly, it can have an indirect affect. According to Freddie Mac’s economists:

“A week after the only rate hike of 2016, the mortgage industry digested the Fed’s decision and this week’s survey reflects that response. Following [Fed Chair Janet] Yellen’s speech last Wednesday, the 10-year Treasury yield rose approximately 10 basis points. The 30-year mortgage rate rose 14 basis points to 4.30 percent, reaching highs we have not seen since April 2014.”

The average rate for a 15-year fixed home loan also rose this week, as did the 5-year Treasury-indexed adjustable mortgage.

Seattle home prices, meanwhile, continue to rise. The median home price in the city rose above $600,000 earlier in 2016, and it’s expected to continue rising throughout 2017.

The message to home buyers is clear: You might want to think about buying sooner rather than later. Housing costs will likely continue moving north over the coming months.

Need a loan? Do you plan to buy a home in Seattle in 2017? Do you need a mortgage loan to make it happen? We can help. Sammamish Mortgage has been helping home buyers in the area for more than two decades. We are a local, family-owned company offering highly competitive rates on a variety of loan products. Please contact us today to get started.