Rising Mortgage Rates and Historical Context

As of June 18, 2024, mortgage rates in Spokane have seen an increase, with the average rate for a 30-year fixed mortgage standing at 6.93% and the average 15-year fixed rate at 6.07%. This rise follows a general trend in the real estate market, where historical analysis shows a continuous decline in listings since 2017. Specifically, there was a 7.8% drop in available properties compared to the previous year, with the median sales price in 2023 falling slightly to $420,000 from $430,000 in 2022.

These factors are heavily influenced by the broader economic conditions and changing interest rates. In December 2023, mortgage rates had a notable dip, reaching approximately 6.6%, which was the lowest point since April of the same year. Industry experts, however, predict a gradual easing of rates over the course of 2024, potentially stabilizing around the 6% mark.

Predictions and Challenges for 2024

For 2024, the outlook appears cautiously optimistic, with experts forecasting a modest increase in the number of homes for sale. This anticipated growth is expected to be fueled by homeowners adapting to the prevailing rate environment and making lifestyle changes. Concurrently, there is an expectation of modest price growth within the market.

Despite these positive predictions, inventory levels remain a critical issue, posing a significant challenge. The inventory of homes for sale is currently at levels that are about half of what was observed in 2017. This shrinking inventory continues to be a barrier for many prospective buyers, especially first-time homebuyers who may find it difficult to secure properties despite potentially lower interest rates.

Regional Insights and Regulatory Changes

When comparing regional trends, Spokane County’s real estate market showcases different figures in contrast to the broader state statistics. For instance, as of November 2023, the median home price in Spokane County was $407,400, which is significantly lower than Washington State’s median home price of $602,000. Broader regional dynamics also highlight a 43.8% increase in home price appreciation statewide over the past three years, with states like Idaho, Montana, Utah, and New Mexico experiencing even higher growth rates.

On the regulatory front, new changes starting January 1, 2024, will require residential real estate brokers in Washington to have a signed brokerage services agreement before providing services to consumers. This move is geared towards enhancing transparency and protecting consumer interests in the real estate transactions, ensuring that all parties are aware of and agree to the terms of service from the onset.