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A strange topic for a blog post I know, but for the past month I have felt like I have been living in the Twilight Zone dealing with ever increasingly aggressive rabbits….

Blame the unusual weather patterns, pesticides, or sheer malicious intent; any and all reasons end with one undeniable fact: The rabbits in Sammamish are out of control and they are Hell-bent on taking one of us with them when they go…

On any given morning, just as the night gives way to the light of day you can see them waiting in the bushes just off the side of local neighborhood roads. Carefully you head down the street, eyes peeled, the radio playing lightly in the background….. And “BOOM!”

Another rabbit shoots out into the road, darting directly under your tires trying to end its own life and damned the consequences if you swerve and cause even more collateral damage.

  • Click Bait?
  • Fake News?
  • Sensationalism?

Recognize that media outlets and social media influencers are competing for scoops and eyeballs. As a result, their reports sometimes exaggerate issues, don’t tell the whole story, or get it wrong…. And the same thing can be said about the local housing market.

Mortgage Rates Just Hit a 4-Month Low, but Do Homebuyers Even Notice—or Care?

Mortgage rates are down again this week, which means things are looking up for homebuyers.

The average rate for a 30-year fixed-rate mortgage ticked down 2 basis points to 6.13%, according to Freddie Mac, continuing a pattern of rates seesawing lower since topping 7% in the fall. In fact, mortgage rates are at their lowest levels since mid-September 2022.

Yet, while lower borrowing costs are a boon for homebuyers, few seem to be pouncing on this opportunity as they might have a year or two earlier.

Affordability woes are still spooking buyers, but another decrease in mortgage rates could bring them back to the market. “Homebuying activity remains tepid, but if rates continue to fall and home prices cool further, we expect to see potential buyers come back into the market,” says Joel Kan, an MBA economist. “Many have been waiting for affordability challenges to subside.”

Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, says that mortgage rates could fall even further in the weeks ahead as investors anticipate the Federal Reserve’s next move. The Fed plans to vote for a smaller rate hike at its meeting next week due to signs of easing inflation. “A stronger housing market could help the U.S. economy skirt a recession,” Evangelou adds.

Meanwhile, ever since the start of this year, mortgage rates have continued to trickle down. “As a result, home purchase demand is thawing from the monthslong freeze that gripped the housing market,” says Sam Khater, Freddie Mac’s chief economist. “Potential home buyers remain sensitive to changes in mortgage rates, but ample demand remains, fueled by first-time home buyers.”

Also, Evangelou notes that consumers seem to be accepting that historically low 3% rates in recent years aren’t likely coming back anytime soon. As rates see less fluctuation, more buyers will likely re-emerge onto the housing market.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 26:

  • 30-year fixed-rate mortgages: averaged 6.13%, falling from last week’s 6.15% average. Last year at this time, 30-year rates averaged 3.55%.
  • 15-year fixed-rate mortgages: averaged 5.17%, dropping from last week’s 5.28% average. A year ago, 15-year rates averaged 2.80%.

Why are mortgage rates falling?

The further mortgage rates dip, the less of a fluke these lower rates appear to be. And for this, we can thank easing inflation.

“This is the first time after nearly two years that the inflation rate is finally lower than it was the previous year,” explains Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors®.

As a result, she predicts, “Mortgage rates may fall even further in the following weeks as investors expect the Federal Reserve to take a smaller rate hike in February.”

Lower inflation rates might spell good news not just for mortgage rates, but also for home prices.

Homes are taking longer to sell.

While today’s slower price gains is good news for homebuyers, so far, they aren’t feeling all that inspired to snap up the goods.

For the week ending Jan. 21, homes lingered on the market 14 days longer than this same time last year, marking six full months of properties taking longer to sell than a year earlier.

This calmer tempo of market activity is a relief to house hunters, who now have more time to make decisions without the pressure to beat out competitors amid the bidding wars that dominated a year back. This is especially true for first-timers, Hale notes, who “are navigating what can be a daunting process even for experienced shoppers.”

On the flip side, Hale adds, “homeowners looking to sell in 2023 will want to be mindful of the slower market pace to set their expectations accordingly.”

Your home might not sell in the first hour it hits the market, in other words—and that’s OK.

An era of more ‘normal’ price gains?

Over the final six months of 2022 homes price fell substantially in the greater Seattle area. While still up from the overheated “Bidding Wars” that raged until early spring of 2022 we are seeing prices adjust down to where what would have been considered a more “normal” price gain than the frothiness of the COVID-19 pandemic period, when prices were expanding week after week by double digits.

2022 Recap

2023 Predictions

National and Industry-Wide Headlines

Home sellers are being cautious.

As for prospective home sellers who might be thinking about listing their homes. They, too, seem to be biding their time.

For the week ending Jan. 21, 5% fewer homes were listed for sale than the same week a year earlier, marking the 29th straight week of declines. That said, homebuyers have plenty to shop for with active listings up 69%.

By February, Hale thinks, more owners might be inclined to sell their homes, which would be a welcome development for the market.

As for what to expect, Evangelou thinks this spring’s homebuying season will perk up, although not quite as much as the past couple of years when mortgage rates hit record lows right while people itching to move hit pandemic highs.

“Generally, home sales activity increases by 33% in March compared to February,” says Evangelou. “However, in the last couple of years, activity was even busier due to low mortgage rates. Even though rates were rising last March, many buyers were rushing to benefit from the 4% rates during that time.”

This March will be different.

“Given low affordability and inventory, activity may not ramp up so fast in the spring season this year, but it will definitely be busier than it currently is,” Evangelou says. “Meanwhile, a stronger housing market could help the U.S. economy to skirt a recession.”

In other words, a strong economy and a strong housing market appear to go hand in hand and could very well be on the horizon.

When In the Best Time To Sell?

NOW is ABSOLUTELY the best time!

Posted by Cary W Porter on


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