Spokane Real Estate Market Sees Shift as Mortgage Rates Decline

The real estate landscape in Spokane, Washington, is experiencing a notable shift as mortgage rates continue their downward trend. As of July 2024, homebuyers in Spokane are witnessing more favorable borrowing conditions, with the 30-year fixed-rate mortgage hovering at 6.712%. This development is part of a broader national trend, where the average 30-year fixed rate has dipped to approximately 6.86%, marking a 14 basis point decrease over the past week alone.

The current rates in Spokane present a range of options for potential homeowners. While the 30-year fixed-rate stands at 6.712%, those looking for shorter-term commitments can explore the 15-year fixed-rate at 5.817%. For those comfortable with some variability, the 5-year adjustable-rate mortgage (ARM) is available at 7.668%. These figures reflect a general improvement in borrowing conditions, offering a glimmer of hope for those who may have been priced out of the market in recent months.

Economic Factors Driving Rate Changes

The decline in mortgage rates can be attributed to several economic factors. Slightly encouraging inflation data has played a significant role in this trend, potentially paving the way for further rate reductions. Additionally, signs of a weakening U.S. economy, including a gradual increase in unemployment and a softening labor market, are expected to contribute to lower mortgage rates in the coming months.

Looking ahead, industry experts from Realtor.com predict that the 30-year mortgage rate will fall below 7% by April 2024 and may reach as low as 6.5% by the end of the year. This forecast offers a positive outlook for potential homebuyers who have been waiting on the sidelines for more favorable conditions.

Impact on Home Prices and Sales

While lower mortgage rates typically stimulate home buying activity, the Spokane market, like many others across the nation, continues to face challenges. Realtor.com predicts that home prices will fall 1.7% over 2024, potentially reducing the typical monthly cost for a median-priced home to $2,200. However, high list prices continue to impact home sales, and inventory levels remain below pre-pandemic figures, albeit with some signs of increase.

Regional variations are expected to play a significant role in home price trends. While the Midwest and Northeast are anticipated to experience strong home price growth, the West, including areas like Spokane, is expected to see a sharp slowdown in home price appreciation. This regional divergence underscores the importance of local market knowledge for both buyers and sellers navigating the real estate landscape in 2024 and beyond.