How Interest Rates Affect Buying a House in Washington

As of January 20, 2025, the average interest rate for a 30-year fixed mortgage was 7.08%, and 6.48% for a 30-year fixed VA home loan, according to Mortgage News Daily. In 2020 rates were historically low, freeing up extra cash for buyers to purchase the home of their dreams. As you can see, these low rates are no longer available, due to inflation and other economic factors. But as many have predicted, rates did come back down in late summer 2024, just not as low as many would have liked to see.

Higher interest rates are causing many to hold off on plans to sell simply because they are "married to their rate", not wanting to lose their historically low interest rate if they were to buy another home. This has contributed to a lack of homes for sale in Washington, but the trends are starting to shift as we have seen an increase since December 2023. This is also likely due to many new construction homes for sale, that are being built in Snohomish County. For instance, Whiskey Ridge has 31 active listings as of 1/20/25 and the average listing price is $832,000 in Marysville Washington. The typical home in Whiskey Ridge has 4 beds, 2.6 baths, and is 2,358 square feet. These homes are being built to offset the shortage but are more than some can get approved for. The good news is, there are loan programs out there that can help many buyers to reach the goal of homeownership!

Are Interest Rates Going to Drop in 2025?

Many think rates will drop in 2025, but so far, they have not. The last significant drop was around December 2nd, at about 6.81% for a 30-year fixed rate, reported by Mortgage News Daily. However, many things are still up in the air with the election cycle and changeover of government. Some people believe rates will not lower very much this year, while others are hoping for big changes. Many people I have spoken to have been holding off on their real estate plans until the elections were over. Regardless, we anticipate spring and summer 2025 to be a busy time in real estate!

Is it a good idea to lock in a mortgage rate?

The hope is that mortgage rates will lower back down once inflation is back under control, but there are never any guarantees when predicting mortgage rates and trying to time the market. However, one guarantee is the sooner you lock in a mortgage, the sooner your home equity clock starts ticking. If you’re ready to become a homeowner, reach out to a lending professional to see what rate and loan type you can qualify for. And if you would like to speak with a trusted local lender, I would be happy to help with a referral!