Spokane Real Estate Market Overview

As of June 24, 2024, mortgage rates in Spokane have reached notable heights, impacting both buyers and sellers in the region. Current rates are 6.96% for a 30-year fixed mortgage, 6.12% for a 15-year fixed mortgage, and 7.36% for a 5/1 adjustable-rate mortgage. These higher interest rates are the direct result of inflation, which has made it more expensive for buyers to finance home purchases, thereby reducing overall affordability within the market.

The Spokane housing market is experiencing a significant shift after several years of rapid price increases. On average, home values in Spokane County have seen a slight decrease of 0.72% year over year. The current average home value now stands at $428,617, down from $431,728 the previous year. This cooling trend indicates a potential stabilization in the housing market, offering both challenges and opportunities for prospective homeowners and sellers.

Factors Influencing the Market

The Federal Reserve plays a crucial role in shaping the broader economic landscape, though it does not directly set fixed mortgage rates. By maintaining a firm stance on inflation control and holding off on rate cuts, the Federal Reserve has indirectly slowed activity in the housing market. Experts foresee a gradual easing of interest rates, predicting they may hover around 6% throughout the year, providing a more favorable climate for buyers.

This period of high interest rates has led to a slowdown in home sales within Spokane. Despite the tempered sales, prices seem to be stabilizing. There exists a considerable group of potential buyers who are waiting for interest rates to decrease before committing to purchases. Historically, Spokane County home values have more than doubled over the last seven years, reflecting substantial growth from an average of $209,659 in 2018 to approximately $430,000 in the recent two tax years.

Economic and Regulatory Insights

The local economic conditions, however, have created a disparity between income growth and housing prices. With a median household income of about $69,000 in Spokane County as of 2022, many residents are finding it increasingly difficult to afford homes. This income level has not kept pace with the rising housing costs, exacerbating affordability issues within the community.

In terms of regulatory changes, starting January 1, 2024, residential real estate brokers in Washington will be required to have a signed brokerage services agreement before offering services to consumers. Additionally, sellers will no longer be mandated to compensate the buyer’s agent. Looking ahead, experts predict modest improvements in the number of homes for sale alongside gradual price growth in 2024, with lower interest rates expected to invigorate the housing market.