Mortgage shoppers got some good news this week, courtesy of the weekly rate survey conducted by Freddie Mac. Mortgage rates in Washington State and around the country dipped this week, in all three of the home loan categories tracked by Freddie Mac. Home prices across the state, however, continue to rise as we enter the last week of March 2017.
Mortgage Rates Drop for Week of March 23, 2017
According to the long-running weekly market survey by Freddie Mac, the average rate for a 30-year home loan dropped this week to an average of 4.23%. That marked a decline of seven basis points (0.07%) from the previous week’s average of 4.30%. This is with an average of half a point paid at closing.
Washington State home buyers got a break in other loan categories as well. The average rate for a 15-year fixed mortgage fell to 3.44% this week, down from 3.50% a week earlier. The average for a 5-year Treasury-indexed adjustable mortgage (ARM) loan declined slightly to land at 3.24% this week.
According to a press release that accompanied the latest survey:
“The 10-year Treasury yield fell about 10 basis points this week. The 30-year mortgage rate moved with Treasury yields and dropped 7 basis points to 4.23 percent. This marks the greatest week-over-week decline for the 30-year mortgage rate in over two months, a stark contrast from last week’s jump following the [Federal Reserve’s] announcement.”
The Fed announcement mentioned above was their recent decision to raise the short-term federal funds rate to a range of 0.75% to 1%, a move expected to bring higher consumer loan rates going forward.
Washington State mortgage rates are higher now than they were a year ago. But they’re roughly where they were at the start of 2017. During the first week of January, the average rate for a 30-year home loan was 4.20%. This week it averaged 4.23%. So overall, we are seeing some year-to-date stability with regard to Washington mortgage rates and elsewhere in the country.
Home Prices Still Rising Across Washington State
Mortgage rates are down this week, but home prices in Washington State are still rising steadily as we approach the spring of 2017. According to the latest figures from the real estate data company Zillow, house values in Washington have risen 10.3% over the last 12 months (March 2016 – March 2017).
A recent report by The Fiscal Times showed that Washington had the biggest increase in home prices, year over year, of any state in the nation. Prices rose by nearly 11%, according to data from CoreLogic.
Frank Wilson, director of the Northwest Multiple Listing Service, expects home values in Washington State to continue rising for the foreseeable future. “With less than a two month supply of inventory, we will continue to see price escalation,” he said.
This has created a sense of urgency among home buyers. While mortgage rates appear to be leveling off, home prices across Washington State continue to rise. As a result, buyers who postpone their purchases until later in 2017 could end up paying more for a house. Most people in the area already know this, due to all of the media coverage. So there’s a lot of demand right now, along with a sense of urgency.