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Should I Lock in My Mortgage Rate Now? Summer 2018 Update

Is now a good time to buy a home in Washington State, with a mortgage loan? Should I lock in my mortgage rate now, or wait a while? What’s the outlook for the second half of 2018, and into 2019?

These are some of the most common questions among home buyers across the state of Washington. To help you make an informed decision, we’ve rounded up some of the latest trends and developments relating to mortgage rates.

Washington Mortgage Rates Decline Again: July 2018

If you’re in the market for a home loan right now, you’ll be pleased to know that mortgage rates have declined for the last three weeks in a row (as of July 5, 2018). This is based on the weekly industry survey conducted by Freddie Mac, which gives us some insight into interest rate movements in Washington and across the country.Freddie Mac Primary Mortgage Market Survey

In its latest survey, Freddie Mac reported that the average rate for a 30-year fixed mortgage loan dropped again to land at 4.52% during Fourth of July week. This is good news for homebuyers in Washington State because it indicates a leveling trend that comes on the heels of a steady climb earlier this year. In fact, Freddie Mac’s economists think rates might have room to fall even further over the coming weeks.

In their latest report, they stated:

“What that means for buyers is good news. Mortgage rates may have a little more room to decline over the very short term.”

Short term, is probably the key part of that second sentence. Housing analysts and economists often do a pretty good job of predicting mortgage rate trends over the coming weeks. Beyond that, however, the picture gets hazier and harder to forecast.

View Washington State Mortgage Rates Sep, 21, Sat, 2019

Should You Lock in That Rate Now?

Home buyers in Washington sometimes try to “time the market” in terms of home prices and mortgage rates. The idea is to lock in a rate at the optimum time, when they at their lowest point of a given period.

But that’s a difficult task, because we just can’t predict what rates will do from one week to the next. Mortgage rates are in constant flux, and there are many different factors that can affect them.

Many experts are predicting that interest rates will rise between now and the end of 2018 — and possibly into 2019 as well.

In its June 2018 forecast, the Mortgage Bankers Association (MBA) predicted that we could see average 30-year loan rates of 4.9% by the last quarter of this year. That’s not far-fetched, when you look at where we are right now. Other forecasters have issued similar predictions. The overall consensus seems to be that mortgage rates in Washington and nationwide could rise toward the end of 2018 and into 2019.

Related: A good time to buy in Seattle?

Home Prices: Another Important Consideration

The prospect of rising home prices is an even stronger possibility. With the steady demand and short supply we are seeing across Washington’s housing markets, it seems very likely that house values will continue to climb for the foreseeable future.

The housing research team at Zillow, for example, recently predicted that the median home value for Washington State would rise by around 7% over the next 12 months.

Which brings us back to the question we started with: Is now a good time to lock in a mortgage rate? If you’re serious about buying, you might want to consider doing it sooner rather than later. Even if rates hold steady for the foreseeable future, rising home prices could chip away at your buying power.

Disclaimer: This article contains forward-looking statements (predictions and forecasts) from third-party sources not associated with our company. We’ve presented them here as an educational service to our readers.

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Have questions? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We currently lend in all of Washington, Oregon, Idaho and Colorado. Please contact us if you have mortgage-related questions.

 

Last Updated: Aug 29, 2019 @ 7:41 am

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