Earlier this year, the The Seattle Times reported that the Washington State housing market was appreciating faster than any other state in the country. According to their June article:
“Soaring costs from Bellingham to Spokane have propelled the state to a record for home prices, surpassing its pre-recession peak for the first time. Just in the last few years, Washington has zoomed up the list of priciest states in the nation and now sits in the top five overall.”
Now, with the end of 2016 in sight, many home buyers are looking ahead to 2017. And many of them are asking the same questions: What’s the forecast for the Washington State housing market in 2017? Will home prices continue rising at their current pace? Or will the market cool down?
According to recent forecasts for the Washington State real estate market, home prices will likely continue rising in 2017, but at a slower pace than what we saw during 2016. Additionally, the state is expected to outperform the nation next year, in terms of annual home-price appreciation.
Washington State Housing Forecast: Smaller Gains Ahead?
The general consensus among housing analysts and economists is that home prices across Washington State will rise more slowly in 2017 than they did in 2016.
The table below shows home-price trends reported by the real estate information company Zillow. The second column shows how prices changed over the last 12 months (as of November 2016, when these figures were reported). The third column shows Zillow’s forecast and expectation for the next 12 months.
|Location||1-year change |
(Nov. 2015 – Nov. 2016)
(Nov. 2016 – Nov. 2017)
Several things will jump out at you when viewing these price trends and projections:
- The company’s economists expect home values across Washington State to rise more slowly in 2017 than they did in 2016.
- For most major cities across the state, the one-year forecast is roughly half of the previous year’s gains (or less).
- Despite the more conservative housing market forecast for 2017, Washington State is still expected to beat the national average in terms of year-over-year price gains.
The bottom line is that home buyers who put off their purchases until later in 2017 could end up paying more for a home, due to continuing appreciation.
Higher Loan Limits in 2017
Here’s another noteworthy development that will affect the Washington State housing market in 2017. Earlier this month, federal housing officials increased the conforming loan limits for the entire state. This was done in response to the rising home prices mentioned above.
In most counties across the state, the 2017 conforming loan limit for a single-family home will be $424,100. In higher-cost markets, like those in the Seattle metro area, the limit is $592,250. Anything above these limits is considered a jumbo mortgage loan.
Here’s an updated list of limits for all Washington counties.
Mortgage Rate Forecasts for 2017
Home prices are an important consideration for Washington State home buyers in 2017. Mortgage rates are another. Analysts with the Mortgage Bankers Association (MBA) have predicted that the average rate for a 30-year fixed home loan will rise gradually over the coming months, nearing 4.5% by the end of 2017.
That’s not far-fetched by any means. At the end of November 2016, the average rate for a 30-year mortgage rose above 4% for the first time since 2015, according to Freddie Mac. Given all of these trends, a strong case could made for buying a home sooner rather than later.
Disclaimer: This article includes forecasts and predictions for the Washington State housing market in 2017. Such statements were provided by third parties not associated with our company. We have compiled and presented them here as an educational service for our readers.