We’ve been talking about the rapid rise of home prices in Washington for quite some time now, and how the state continues to outpace the nation. Well, here we go again.
Two recent reports by CoreLogic, a real estate data and analytics firm, showed that Washington State had the biggest home-price gains and the most equity growth for homeowners — of any state in the nation.
Recent forecasts suggest that the state could experience continued home-value appreciation through the rest of 2018 and into 2019.
Washington Had Biggest Home-Price Gains of Any State
According to a June 5, 2018 news release from CoreLogic, home values in all 50 states rose in April 2018, compared to the same month last year. Washington saw the biggest price gains of any state in April, which a year-over-year increase of 12.8%. (By comparison, home prices nationwide rose by an average of 6.9% during the same 12-month period.)
So it’s official, based on this report anyway. House values in Washington have once again risen more than any other state in the country.
These trends affect different people in different ways. Home buyers who have been “on the fence” about making a purchase over the last few months will encounter higher housing costs. Homeowners, on the other hand, are enjoying unprecedented levels of equity growth as their home values continue to rise.
And that leads us to a separate but related report about home-equity growth across the nation. Once gain, Washington led the way…
Homeowners Gained $44,000 in Equity, on Average
On June 7, CoreLogic published another report that showed U.S. homeowners gained an average of $16,300 in equity from the first quarter of 2017, to the first quarter of 2018. That was the national average. Home equity growth in Washington State was much higher than that.
According to the company’s report:
“While home equity grew nationwide, western states experienced the largest increase. Washington homeowners gained an average of approximately $44,000 in home equity…”
This is only logical. A real estate market that experiences the largest price gains would also see the most dollar growth in equity levels. They’re practically one and the same.
A Lack of Housing Inventory and New Home Construction
One of the reasons why home equity has risen so much in Washington is the inventory factor. Or lack of it. There’s currently a shortage of homes for sale across the state, relative to the number of buyers who are seeking them.
This is true for the nation as a whole. According to Dr. Frank Nothaft, an economist who specializes in housing: “New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures.”
Inventory conditions are particularly tight in Washington. In fact, the state is home to some of the most constrained — and most competitive — real estate markets in the country. And nowhere is this more evident than in the Seattle metro area. As of May 2018, Seattle had less than a one-month supply of homes for sale. A five- to six-month supply is considered “balanced.”
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region. Please contact us if you have mortgage-related questions.