Housing Market Inventory Surges as Interest Rates Remain High

•         New Inventory Increased by 35.1% compared to 2024
•         The number of homes for sale increased 44.6% year-over-year
•         Mortgage Rates are currently at 6.95%
•         Inventory expected to hit near a decade high by May-June

Traditionally a quieter month in the winter season, January’s activity continued the year-over-year growth trends observed in market activity over the last twelve months. NWMLS brokers added 6,693 new listings to the database in January 2025, an increase of 35.1% compared to January 2024 (4,954). The number of closed sales increased by 10.8% year-over-year (3,727 in January 2025 compared to 3,364 in January 2024),

“For-sale inventories are continuing to rise from historical lows, and that’s helping bring some life to housing market activity in the NWMLS area,” said Selma Hepp, chief economist at CoreLogic.

But questions still abound regarding one of the most critical aspects of today’s market – affordability – and the political and economic factors that influence it.

“Both prices and interest rates continued to increase, having a negative effect on affordability,” said Steven Bourassa, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington. “The median price rose by nearly 4% to $615,000, while interest rates rose from 6.69% at the end of January 2024 to 6.95% now.”

The central bank recently announced a pause from the rate-cutting path it kicked off last fall in order to observe incoming economic data. The more likely stance now is that rates will stay near current levels for most of 2025.

If the labor market weakens with higher unemployment figures, or inflation nosedives, it could push bond yields down, translating to lower mortgage rates. Most economic forecasts call for a gradual decline in mortgage rates over the course of 2025, but not by much. Fannie Mae expects average 30-year fixed mortgage rates to hold above 6.5% until mid-2025. 

“All of this suggests that the affordability of homeownership, which has been declining, will continue to do so,” said Bourassa.

However, as late spring and summer approach with increased inventory levels buyers will begin to get the upper hand in some areas and prices may begin to soften.

Buyers could find more opportunities next year as more inventory in the region becomes "unstuck" and attracts homebuyers. While sellers will feel the heat of competition as buyers will have more homes to choose from.

This means that for sellers, the market will peak earlier this year than last. In fact, by April-July, we are expected to be above average inventory levels for the first time in nearly a decade.

Timing the Market can put Money in your Pocket

January 2025 Key Takeaways

Active Inventory for Sale

• The number of homes for sale increased 44.6% year-over-year throughout the NWMLS coverage area, with 22 out of 26 counties seeing a double-digit increase compared to January 2024. There were 10,241 active listings on the market at the end of January 2025, compared to 7,084 at the end of January 2024.
• The five counties with the highest increases in active inventory for sale were Snohomish (+96.9%), King (+62.6%), Skagit (+54.4%), Kittitas (+53.8%) and Grant (+48.8%).
• Inventory going into the new year is already significantly higher than in 2024, meaning that if considering selling your home listing early in 2025 means less competition and “Best” opportunity for a higher sales price.
• by April-July, we are expected to be above average inventory levels for the first time in nearly a decade.

Be sure to ask these important questions before you hire a Broker to help sell your home: 

What You Don’t Know About Hiring a Real Estate Agent Could Cost You.