Western Washington has seen it all over the last two years. Homebuyers who waive all contingencies, bidding wars that drive up prices, and homes selling for well over asking price as the region continues to grapple with this hot market. However, now that interest rates are rising, the tables may be turning.
Interest rates have jumped more than 2% since the start of the year – the biggest quarterly increase in 28 years. As of May 3rd, the rate on a 30-year fixed mortgage hit 5.42% and a 15-year fixed mortgage rate came in lower, at 4.65%. The rising rates may pave the way for a correction in property values, and encourage current homeowners to sell, which will increase inventory.
These factors all lead to what we are seeing now, a spike in inventory. According to Zillow, Seattle saw a 37.5% increase in inventory since February. This increased supply could potentially lead to more negotiation power for active homebuyers.
It is important to recognize that this shift represents a swing back toward a more balanced housing market.
We predict a thriving housing market for months to come!