Current Mortgage Rates and Federal Reserve Influence

The real estate market in Spokane is currently influenced by several critical factors, with the most prominent being the fluctuating mortgage rates. As of now, the average 30-year fixed mortgage rate in Washington has seen a decrease of 10 basis points, resting at 6.47%. This figure, although lower than the recent average of around 7%, is still considerably higher than the historic low of 2.65% recorded in January 2021.

The Federal Reserve, although not directly setting fixed mortgage rates, plays a significant role through its policy decisions. In an effort to curb inflation, the Federal Reserve has refrained from cutting rates, which has in turn slowed down the housing market. This has created a challenging environment for prospective homebuyers who are finding it increasingly difficult to afford homes.

Impact on Spokane County and Affordability Challenges

High interest rates have had a substantial impact on the housing market in Spokane County. One notable consequence is the first year-over-year decrease in home values for over a decade, reflecting a leveling of the market. However, this adjustment in home values has not necessarily translated to improved affordability for the average resident.

The median household income in Spokane County stands at approximately $69,000, which has not kept pace with the rising housing prices. Despite the recent decrease in mortgage rates, the overall prices remain out of reach for many. This disparity is further exacerbated by high interest rates, making it even more challenging for the average Spokanite to secure a home within their budget.

Property Assessments and Tax Distribution

Adding to the financial challenges, homeowners in Spokane County have recently received their property assessments for the 2025 tax year. These assessments, which reflect the county’s estimates as of January 1, tend to be lower than the actual market values. While this may offer a slight reprieve, it still places a significant financial strain on homeowners when property tax payments come due.

The allocation of property taxes is also an important aspect to consider. A significant portion of these taxes is directed towards funding schools. The remaining funds are distributed among various entities, including cities, fire districts, county government, and other services. This distribution highlights the broad impact of property taxes on community resources and services.