High Interest Rates Still a Problem, but Markets Are Improving

Market Recap

High mortgage interest rates continue to be a drag on home sales, discouraging both potential buyers facing high-rate mortgages and would-be sellers wanting to keep their low-rate mortgages. However, there are signs that the housing market is loosening up and that interest rates are declining and likely to decline even further in the coming months. Home sales are up 5.9% year-over-year in the NWMLS market area, and the number of active listings increased 37.7% relative to last year at this time. According to Freddie Mac, 30-year mortgage rates are at their lowest since February 2024 (6.73% as of August 1st).

July 2024 Key Takeaways

Active Listings

• There was a 37.7% increase in the total number of properties listed for sale, with 15,122 active listings on the market at the end of July 2024, compared to 10,982 at the end of July 2023.
• The number of homes for sale increased throughout Washington, with 25 out of 26 counties seeing a double-digit year-over-year increase.
• The six counties with highest increases in active inventory for sale were Douglas (+80.8%), Pierce (+51.2%), Walla Walla (+49.6%), Lewis (+49.3%), Snohomish (+47.8%), and Mason (+43.7%).

Closed Sales

• July 2024 saw a 5.9% increase in the number of closed sales transactions year-over-year (6,615 in July 2024 compared to 6,247 in July 2023).
• 19 out of 26 counties saw an increase in the number of closed sales year-over-year, while 7 saw a decrease.

Median Sale Price

• Overall, the median price for residential homes and condominiums sold in July 2024 was $650,000, an increase of 5.7% when compared to July 2023 ($615,000).
• The three counties with the highest median sale prices were King ($880,000), Snohomish ($775,000), and San Juan ($740,000), and the three counties with the lowest median sale prices were Columbia ($270,000), Pacific ($290,000) and Ferry ($319,900).

“Although the Federal Open Market Committee of the Federal Reserve Bank did not lower rates at its July 31st meeting, it suggested that it might do so in mid-September,” Steven Bourassa, director of the Washington Center for Real Estate Research at the University of Washington, said. ‘“A weak jobs report, largely reflecting a growing labor force, combined with low inflation suggests that the Fed will indeed lower rates next month with additional rate cuts expected at subsequent meetings.”

Consumer and Broker Activity

NWMLS also provided insights into consumer activities during the month of July 2024:

• Keyboxes located at listed properties were accessed 156,268 times in July 2024, a 4% decrease in activity from June 2024 when they were accessed 163,536 times.
• The total number of property showings scheduled through NWMLS-provided software saw a slight decrease from July 2024 (119,775 showings) to July 2024 (117,298 showings).
• In July 2024, there were 17,515 listed properties that were eligible for the Down Payment Resource (DPR) program offered by NWMLS, an increase of 19.8% over July 2023.