Is Now a Good Time to Buy?

Is Now a Good Time to Buy a Home in King or Snohomish County?

“Should I buy now, or wait for rates to come down?”

I have been hearing that question a lot. It is reasonable to ask, especially when a small rate change affects the monthly payment. But the interest rate is only one part of what you are buying. The price you negotiate, the seller’s willingness to help with costs, and the amount of competition all matter too.

Right now, I think there is a real opportunity for buyers in parts of King and Snohomish counties, if the payment works for them today.

Buyers have more room to negotiate

The latest Northwest MLS numbers show why buyers may have more room to negotiate. At the end of September, active listings were up 31.1% from a year earlier in King County and 44.2% in Snohomish County. King had 4.70 months of inventory and Snohomish had 3.85 months. Homes that closed in September spent an average of 40 days on the market in both counties, compared with 36 days in King and 37 in Snohomish a year earlier. That does not mean every home will sit for 40 days, but it does mean buyers have more choices and, with the right seller, more opportunity to discuss price and terms.

These averages don’t tell us what will happen with a specific home in Shoreline, Edmonds, North Seattle or Kirkland. However, it does tell buyers that sellers can be motivated and on the right property, a buyer may have room to negotiate the price, request repairs, or ask the seller to contribute toward closing costs or a mortgage rate buydown.

Those terms can make a meaningful difference and will make a financial impact. When the market is filled with buyers these sorts of negotiations aren’t available, driving the costs up (even if the interest rate is lower).

Would waiting for a lower rate help?

It might. A lower rate would reduce the payment on the same loan amount. But if lower rates bring more buyers back into the market, you may face more competition for the homes you want. That could mean a higher purchase price, fewer seller concessions, or both.

I would not build a purchase plan around a quick drop in rates.  I cannot tell you when/if they will fall or what a particular home will be worth next year. I can help you compare the options available now: What would this home cost each month? What could we reasonably negotiate? Would a seller credit be more useful toward closing costs, a temporary buydown, or a permanent rate reduction?

A temporary 3-2-1 buydown can lower the payment for the first three years. If rates fall refinancing  may be an option and in the meantime your house is likely building equity. However, it only makes sense if you are comfortable with that full payment should the rates not fall.

What is the cost of waiting?

Renting may be the right choice, particularly if you need flexibility or more time to save. But it is worth comparing the long-term costs, not just this month’s rent and mortgage payment. Across King County, single-family home rents have seen a year-over-year increase of roughly 3.0% to 4.5%. According to Zillow Rental Manager and Rentometer statistics the average rent for a 3-bedroom house in King County generally ranges between $3,200 and $3,850 per month, depending on the precise location, square footage, and amenities.

With a 30-year fixed-rate mortgage, your principal and interest payment stays the same. Taxes, insurance, maintenance and any HOA dues can change, but you gain stability in a major part of your housing cost.

Buying also gives you the chance to build equity, though appreciation is never guaranteed. In fact, Washington’s home price index was slightly lower than a year ago, but even so home prices are nearly 20% higher than five years ago. That is a good reminder to buy a home that fits your life and budget, not one that depends on prices rising quickly.

So when is the best time to buy?

When it’s right for you. There are many factors when looking to buy a house, not just rates. For someone who finds the right home, can afford the full payment, and expects to stay for several years, today’s market has a lot to offer in time and negotiating room.

If you are wondering if you are ready for home ownership or thinking of making a change reach out. I would love to help guide you and see if it’s the right time for you.