What Will Seattle’s Real Estate Market Look Like in 2021?

The coronavirus pandemic upended nearly every part of life throughout the year — but the Seattle-area housing market stayed strong. Low inventory, high buyer demand and rising prices continued throughout the year, creating a competitive market even through the holidays, which normally marks a slowdown. But, will it continue into 2021?

Experts say it’s likely the Seattle-area housing market won’t cool down over the next year. Prices will continue to rise, though somewhat slower than they did year over year in 2020. And the market will stay competitive, with homes likely continuing to receive multiple offers, especially if interest rates remain low.

As employers adopt more flexible work-from-home policies, people will likely be looking for more space in their homes to have room for a home office, and could look farther out of the city without having to worry about their commutes.

Here’s what else experts are predicting about what the 2021 housing market will look like in Seattle:

Jeff Tucker, senior economist, Zillow

Tucker said through November 2021, the projections show home prices rising nearly 9% in Seattle, which he called “robust” price growth. Seattle has had some of the fastest price appreciation among major metro areas in the country over the last several months.
Tucker said he’s expecting that price growth to continue — but not quite as fast as it has been recently.

Throughout 2020, home prices in Seattle rose drastically year over year. Part of that, Tucker said, is because much of 2019 was a bit of a “soft patch” for the Seattle real estate market. But low interest rates have expanded the number of buyers that could afford the monthly payments, and has opened up the market more to first-time home buyers.

Tucker said he expects low inventory to continue into 2021 as well. But he said the inventory shortage in the city might not be as “acute” in the Seattle region in the spring and summer.  A lot of homeowners, he said, who were thinking about selling had put if off for one reason or another this year during the pandemic.”They could come out of the woodwork,” Tucker said.

“But in the meantime, it makes it a really attractive time to sell, if you’re cashing out and moving … this would probably be a good time,” Tucker added. “I think there will be more listings next year which could bring a bit more balance to the market.”

In the spring when the pandemic hit, a lot of activity was put on hold and the number of completed transactions and pace of price appreciation slowed down. So, Tucker said, compared to spring of 2020, the pace of home sales and the number of listings in 2021 will be higher.

“I think a lot of that kind of traditional spring home shopping activity will come warring back,” Tucker said. “We still seem to have some pent up demand for people who have been unable to finish buying a house.”

Seattle still has many high paying jobs and employment is strong in many of the industries driving employment in Seattle, despite the pandemic. Those jobs pay high incomes, meaning a certain segment of the workforce in the Seattle region is still able to buy homes, Tucker said.

But because of the pandemic, a lot of spring buyers were bumped into the summer. The market was so competitive and homes were selling so fast, that a lot of summer buyers were still unable to buy homes, Tucker said.

That’s why the city has been seeing homes staying on the market for a very short period of time before getting offers.

“Homes are selling very very quickly,” he said. “It suggests to me that the spring market is going to hit the ground running.”

Into 2021, people will likely be looking for certain features that are a little different than what people may have wanted in the past. Tucker said the pandemic has expanded the size preference buyers are looking for, with many buyers searching for one more bedroom to be used as a potential home office.

“A lot of people are still working from home and will be well in 2021…so we have seen the demand shift a little,” Tucker said.

People are also looking more so for detached single family homes as opposed to condos.

“We saw more price pressure on the detached single family homes,” Tucker said.
Tucker said he also expects the market to remain “really hot” in other parts of the Seattle metro areas such as South King County and Pierce County. Some of those areas are seeing very fast price appreciation, he said. And it’s likely there won’t be a huge wave of people moving out of the city, Tucker said.

Buyers in 2021 should be ready to move quickly, Tucker said. Overall, Tucker said, the Seattle area housing market will stay hot into 2021.

Daryl Fairweather, chief economist, Redfin

Fairweather said she is expecting an increase in sales both nationally and in Seattle starting off the new  year.
People are moving to Seattle from more expensive places, such as San Francisco and Los Angeles, and people are also looking to move from Seattle to the suburbs, or out of town entirely, she said.

Fairweather said most people are looking for a move to an area with more space, since many people aren’t as tied to the office anymore and won’t necessarily have to commute through traffic. They could be more open to moving somewhere like Snohomish County or Tacoma.

Fairweather said she expects the market in the Seattle area to continue to be competitive into 2021.

Currently in Seattle, new listings are up during a time of year that is normally slower, but the total number of active homes is down. Even though new listings are up, people are snatching up homes off the market incredibly quickly. “It’s a really fast market,” Fairweather said. “People understand the market is competitive.”She said it’s hard to imagine the market getting faster, but it will remain fast-moving and competitive.

The adoption of virtual tools is likely here to stay as well, Fairweather said. At the beginning of the pandemic, agencies quickly adapted to using new tools such as virtual tours to more safely and efficiently let people see and list homes — even when coronavirus restrictions were at their strictest. These tools now mean people can spend less time actually looking at the homes in person. The pandemic has also resulted in more people being more open now to making offers on homes sight unseen — a trend Fairweather said will likely continue.

As far as prices, Fairweather said she expects they will still be high in the Seattle area going in 2021, but the city could see a stabilization in home prices. Part of that is because prices went up so significantly in 2020, and 2019 was a relatively slow year for the Seattle area housing market.

“2021 is going to be more comparable to 2020, so it’s not like prices are going to speed up any, but we will continue to see price growth,” she said.
Bidding wars will also likely continue into 2021. Fairweather said she thinks the reason people are so eager to get into bidding wars is because of how low mortgage rates are, which makes it a desirable time to buy a home.

Mortgage rates could start to creep up halfway through 2021, Fairweather predicted, but there’s a “window of opportunity” for people when rates are still at their record lows.
That could push the buying season up. Fairweather said she expects the city will continue to see strong sales in January and February, and it will be unseasonably busy.
After that, the growth rate could level off and the summer months and into the fall may look more like a normal  year.

“If the world looks a little bit back to normal, and kids are back to school, the fall will go back to being a much slower time for the housing market than it was this fall,” she said.
She does expect there will be more listings next year. A lot of people this year were nervous to list because of the pandemic. Now, people are seeing prices going up and are eager to cash in on their home values. That’s going to lead to new listing growth, she said.

People are also looking for some specific features in their new homes, including seeking out more space. Home offices are going to be very popular, especially for people who don’t think they’re going to be going back to the office anytime soon — or won’t be going back as often as they used to. People are also looking for single-family homes and bigger yards.

The suburbs of Seattle, which are already very competitive, will likely continue to be seriously competitive next year, she said. But, it could look a little more balanced in the months to come, especially if restaurants and bars start to open back up, making people want to be closer to the city.

“I think the suburbs would be more competitive, but I wouldn’t count out downtown Seattle either,” Fairweather said. When might the Seattle area housing market cool down? “Not in 2021,” she said. “I would put that out to 2022 or later.”

J. Lennox Scott, chairman and CEO, John L. Scott Real Estate. 

Scott said he expects there to be a surge of new buyers at the start of the new year, but that inventory in the Puget Sound region will remain low until March 2021.

“We anticipate the ‘cyclone’ of housing market sales activity intensity will continue at extreme frenzy-level velocity (where about 90 percent of sales activity takes place) through April 2021,” he wrote in 2021 projections. “Then, sales activity intensity will probably go down one level of hotness to frenzy or surge over the summer as more listings come on the market for potential purchasers.”

The luxury market in the region will also likely stay strong, he said.

“The strong price appreciation we saw in 2020 will continue in 2021 as the biggest price boost will occur within the first four months of the year,” he said.

In 2021, buyers and sellers could see prices becoming out of reach for some, as well as an increase in interest rates when the economy starts to get better.

His recommendation for buyers and sellers: be ready on day one.

by Becca Savransky, Seattle P-I

Seattle-area housing market remains strong for the holidays

The Seattle-area housing market remained strong in November, even as the holiday season kicked off, normally signaling a slower market.

According to the latest report from Northwest Multiple Listings Service, inventory is still down compared to the same time last year, while closed and pending sales are up over last year.

“The holiday rush is on for housing,” said J. Lennox Scott, chairman and CEO at John L. Scott Real Estate. “Though real estate activity typically chills down in alignment with the dropping temperatures, the housing market is anything but calm this winter given the historically low interest rates.”

Compared to last month, the market has shown some indicators it is slowing. In King County there were 2,867 total active listings, down from 3,806 last month and down about 18% over the same time last year. Compared to 2019, King County saw a nearly 6% increase in pending sales in November. But compared to last month, King County saw a more than 20% decrease in pending sales.

King County had 3,098 closed sales in November of this year, an increase of more than 23% over last year, but a decrease from the 2,857 closed sales the county saw last month.

The median price for closed sales in King County remained the same in November as it was in October, at $685,000, still a nearly 12% increase over the same time last year.
Windermere Chief Economist Matthew Gardner said “activity remains higher than we would normally see at this time of year.”

“This isn’t too surprising given the fact that the spring selling season was essentially cancelled due to COVID-19,” Gardner said.

Buyers starting the search should make sure they are as prepared as they can be to compete on homes receiving multiple offers, experts said. With low inventory, competition remains high, as it has throughout most of the year.

“Offers that have the best chance of acceptance are from buyers who are pre-approved with a local lender or have cash,” said NWMLS director Meredith Hansen, owner/designated broker at Keller Williams Greater Seattle. “Buyers also need to be prepared to have a pre-inspection in order to waive that contingency, and be ready to escalate in price if necessary.”

And even with the new restrictions that went into effect last month in Washington which prohibit open houses, people didn’t appear to be deterred from moving forward with buying homes.
“Even though open houses were curtailed in mid-November, buyers were making in-person appointments to view properties and many desirable listings had solid activity right up to the offer review date,” John Deely, principal managing broker at Coldwell Banker Bain of Lake Union said.

Gary O’Leyar, designated broker/owner of Berkshire Hathaway HomeServices Signature Properties, called November one of “our busiest months for sales and closings in years.”

“Consumer confidence in both real estate and employment have been the benchmarks of our strong real estate market,” he said.

By Becca Savransky, Seattle PI

Home purchase mortgage applications 28% higher annually

  • Mortgage applications to purchase a home jumped 9% last week from the previous week and were 28% higher annually, according to the Mortgage Bankers Association.
  • Applications to refinance a home loan fell 5% for the week, but were an impressive 102% higher than a year ago.

Thanksgiving week isn’t usually a popular time for homebuying, but most economic numbers this year are incomparable, especially in the pandemic-spiked housing market.

Mortgage applications to purchase a home jumped 9% last week from the previous week, according to the Mortgage Bankers Association’s seasonally and holiday adjusted index. Purchase applications were a stunning 28% higher from a year ago.

 “Purchase activity continued to show impressive year-over-year gains, with both the conventional and government segments of the market posting another week of growth,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Housing demand remains strong, and despite extremely tight inventory and rising prices, home sales are running at their strongest pace in over a decade.” 

Fast-rising prices caused the average purchase loan amount to hit $375,000 last week, the largest since the inception of MBA’s survey in 1990. Low mortgage rates are not only giving buyers emotional incentive, they’re also giving them more purchasing power, and helping to inflate prices.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) was unchanged at 2.92% last week, a record low, with points decreasing to 0.31 from 0.35 (including the origination fee) for loans with a 20% down payment. That rate was 105 basis points higher a year ago.

 Applications to refinance a home loan fell 5% for the week, but were an impressive 102% higher than a year ago.  

“The ongoing refinance wave has been beneficial to homeowners looking to lower their monthly payments during these challenging economic times brought forth by the pandemic,” said Kan, adding that the mortgage industry is poised for its strongest year in originations since 2003.  

by Diana Olick, CNBC

Housing Affordability Inches Down, Despite Record-Low Mortgage Rates

Despite hovering around their all-time low for several months now, it looks like mortgage rates have done about all they can for housing affordability.

According to a new report, skyrocketing home prices have now outstripped their power, and overall homebuying affordability is now moving downward.

Data from mortgage insurer First American shows that record-low mortgage rates boosted American homebuying power for much of 2020. At one point, buyers could afford a whopping $15,000 more house thanks to declining interest rates.

But now, with home prices up 8% over last year and 1.5% between just July and August, those days have officially come to an end.

Despite hovering around their all-time low for several months now, it looks like mortgage rates have done about all they can for housing affordability.

According to a new report, skyrocketing home prices have now outstripped their power, and overall homebuying affordability is now moving downward.

Data from mortgage insurer First American shows that record-low mortgage rates boosted American homebuying power for much of 2020. At one point, buyers could afford a whopping $15,000 more house thanks to declining interest rates.

But now, with home prices up 8% over last year and 1.5% between just July and August, those days have officially come to an end.

“Mortgage rates began declining in January 2020 and even dropped below 3% for the first time ever in August.,” says Mark Fleming, chief economist at First American. “But, as mortgage rates have fallen and the housing market has recovered amid strong demand and historically low supply, nominal house price appreciation has rapidly accelerated. In August, the dynamics powering affordability may have reached a tipping point.”

According to the report, affordability dropped by about $775 in August, despite mortgage rates hitting a new monthly low of 2.92%

Though the dip is small, Fleming says it indicates that rising home prices have begun to “erode the affordability gains of recent years.”

Buyers located in the Census Bureau’s Mountain region have it the worst. There, prices have risen by 9.2% in the last year. That area includes Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming.

At the metro level, home prices have risen the most in San Diego, Seattle, Cleveland, San Francisco, Los Angeles, Washington D.C., Boston, Phoenix, Miami and Tampa, Fla. In San Diego, prices rose nearly 30% between August 2019 and August 2020.

Only three markets have seen price growth decelerate: New York, Chicago, and Portland.

~ Aly Yale, Forbes

What Buyers Focus On Most When Touring A Home, According To Eye-Tracking Software

Turns out, it isn’t all about the stainless steel appliances.

One of the many mantras in the real estate world is the saying “kitchens sell houses,” but until now there has been very little information about exactly what it was in a kitchen that would make buyers pay attention. With the help of a few homebuyers wearing glasses that track eye movements, we are beginning to have some hard facts.

It isn’t the shiny metallic fridge or the latest high-tech dishwasher their eyes go to when they first walk in the kitchen. It’s the oven. Many of the buyers in the study would go so far as to look inside the oven, and some of them would even turn it on to see how well it worked. So if you’re selling your home, make sure the oven is so clean it sparkles inside and out. If it isn’t in working order or has a few bad burners, you don’t necessarily have to get it replaced, but you might consider offering the buyer a credit for a new one.

Bedrooms are one of the next priorities in a house that can make or break a sale and eye-tracking software reveals a buyer’s eyes go straight to the bed when they walk into the room. Most likely buyers are wondering if their bed will fit in the space and if there is enough room to fit the rest of their furniture as well. This means if you’re in triage mode when it comes to decluttering on short notice, make the bedrooms a priority over other rooms in the house.

Outdoor accessibility was another big takeaway from the study. When buyers walked into a room that accessed the backyard their eyes immediately went to the outdoor space and the doors that opened out to it. Make sure the windows and doors (if they have glass) are as clean as can be so they show off the view to the outdoors in the best way possible.

But how about those stainless steel appliances? Are they worth it in the end? This study wasn’t designed to measure whether people’s eyes looked at stainless steel more than other types of finishes, but I’ll pass on the main reason why they have become so much of a trend: They can make a small kitchen look much bigger. The reflective surface acts the same way a mirror does by bouncing light around the room and giving the impression of spaciousness. To continue with the mirror example, a designer once told me hanging a mirror is almost as good as adding a window to a room. Stainless steel can have the same impact within a kitchen so it is still worth keeping it in mind if you are going to buy a new appliances.

~ Amy Dobson, Forbes

Home Sales Continue To Rise Despite Low Inventory

Existing home sales continued their surge in September, marking the fourth consecutive month of a strong upward trajectory, according to the National Association of Realtors.

Each of the four major regions witnessed month-over-month and year-over-year growth, with the Northeast seeing the highest climb in both categories.

Total existing home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 9.4% from August to a seasonally-adjusted annual rate of 6.54 million in September. Overall sales rose year-over-year, up 20.9% from a year ago (5.41 million in September 2019).

In a low-interest rate environment, many buyers who are juggling remote work and learning are searching for larger homes with extra rooms and a dedicated place for an office.

“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” said Lawrence Yun, NAR’s chief economist. “I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”

The median existing home price for all housing types in September was $311,800, up 14.8% from September 2019 ($271,500), as prices rose in every region. September’s national price increase marks 103 straight months of year-over-year gains.

Total housing inventory at the end of September totaled 1.47 million units, down 1.3% from August and down 19.2% from one year ago (1.82 million). Unsold inventory sits at a 2.7-month supply at the current sales pace, down from three months in August and down from the four-month figure recorded in September 2019.

The week of Oct. 17 marked the fourth week in a row of homes selling nearly two weeks faster than the prior year.

“During a time when the housing market usually slows down, we are once again reminded that 2020 is anything but typical,” said realtor.com chief economist Danielle Hale. “Going into the last half of October, the median U.S. home for sale is still priced near the year’s peak and is selling almost two weeks faster than last year. At the same time, the pace of change has steadied and for some indicators, even slowed. This could be a welcome relief for buyers who have navigated not only a pandemic, but also a fiercely competitive 2020 homebuying season characterized by double-digit price growth and record low inventory.”

Bidding wars have erupted in many markets where would-be buyers fought over a dwindling supply of homes.

Ruben Gonzalez, chief economist for Keller Williams real estate franchise, predicts mortgage rates will continue to drive demand and are going to remain near record lows the rest of the year, and likely well into 2021.

“Accelerating price increases are potentially going to start to reverse some of the benefits we are seeing from low mortgage rates, and this could start to slow demand from entry-level buyers as their purchasing power diminishes,” he said.

The average commitment rate for a 30-year conventional, fixed-rate mortgage decreased to 2.89% in September, down from 2.94% in August, according to Freddie Mac.

Sales in vacation destination counties have seen a strong acceleration since July, with a 34% year-over-year gain in September.

“The uncertainty about when the pandemic will end coupled with the ability to work from home appears to have boosted sales in summer resort regions, including Lake Tahoe, mid-Atlantic beaches (Rehoboth Beach, Myrtle Beach), and the Jersey shore areas,” said Yun.

Properties typically remained on the market for 21 days in September – an all-time low – seasonally down from 22 days in August and down from 32 days in September 2019. Seventy-one percent of homes sold in September 2020 were on the market for less than a month.

“Higher earners have been more likely to retain their incomes, allowing the housing market to continue booming despite extremely high unemployment levels,” said Gonzalez. “As long as unemployment remains elevated, there is a possibility that we see layoffs spill into the higher-paying sectors that are currently propping up the housing market.”

First-time buyers were responsible for 31% of sales in September, down from the 33% in both August 2020 and September 2019.

Individual investors or second-home buyers, who account for many cash sales, purchased 12% of homes in September, a small decline from the 14% figure recorded in both August 2020 and September 2019. All-cash sales accounted for 18% of transactions in September, unchanged from August but up from 17% in September 2019.

“It’s a tale of two economies,” said Tendayi Kapfidze, chief economist for LendingTree, an online lending marketplace. “Higher income groups are doing far better than lower income groups. Home sales were at a 14-year high, but the details are informative. Homes under $100,000 were down 16.3%, from $100,000 to $250,000 up 4.3% but homes over $1 million were up 106.5%. This change in the mix of homes is a driver of the jump in prices.”

~ Brenda Richardson, Forbes

Puget Sound region sees ‘extraordinary’ drop in housing inventory

Puget Sound region sees ‘extraordinary’ drop in housing inventory
Posted on October 20, 2020

Amid the ongoing pandemic, the Puget Sound housing market has become a peculiar one to say the least, thanks in large part to plummeting inventory.

Housing prices across King, Snohomish, and Pierce County have skyrocketed over the last month, with double-digit year-over-year increases in median home prices in all three areas. This comes amid an historically low inventory for prospective home buyers Windermere Chief Economist Matthew Gardner says.

“We have to go back to good old Economics 101,” Gardner said. “When you have net new demand and you limit supply, what happens to prices? They rise, and that’s very much the case.”

According to the Northwest Multiple Listing Service (NWMLS), all three major counties had under a month’s worth of inventory in September, a year-over-year decrease of 43%. Looking at historical data dating back to 1999, Gardner couldn’t find a single month with inventory supply that low.

“It is quite extraordinary,” he noted. “Yet at the same time, buyers are clearly out in force.”

Despite the economic recession brought on by the COVID crisis, demand has been buoyed by “remarkably, historically low mortgage rates,” and a surge in high-income buyers.

“In most areas, we are virtually sold out in the more affordable, mid-price and upper end segments of the market,” John L. Scott Real Estate CEO J. Lennox Scott told the NWMLS in a recent news release. “We’re also seeing a record-setting number of luxury properties going under contract across King, Pierce, and Kitsap counties.”

Elsewhere, the downstream effects of the recession have largely been felt by lower income renters, rather than homeowners.

“Middle and upper middle classes are doing just fine,” Gardner described. “The wealthy are doing really well, and lower income households are absolutely not. They are hurting more than anyone else.”

~Nick Bowman, KIRO

August pending home sales soar to a record high, fueled by rock-bottom mortgage rates

Pending home sales rose 8.8% in August compared with July, reaching a record high pace, according to the National Association of Realtors survey, which dates to January 2001.

Sales were 24.2% higher than August 2019.

These sales track signed contracts on existing homes, not closings, so they are an indicator of closed sales in the next one to two months.

“Tremendously low mortgage rates – below 3% – have again helped pending home sales climb in August,” said Lawrence Yun, NAR’s chief economist. “Additionally, the Fed intends to hold short-term fed funds rates near 0% for the foreseeable future, which should, in the absence of inflationary pressure, keep mortgage rates low, and that will undoubtedly aid homebuyers continuing to enter the marketplace.”

Yun also noted that not all pending sales contracts turn into closed sales, due to both sampling measures and mortgage and appraisal issues; therefore we may not see record closed sales in the coming months.

Mortgage rates started the month falling to a new low. They jumped sharply mid-month, but only briefly. Low mortgage rates have given buyers more purchasing power and added fuel to fast-rising home prices.

Homebuyers have been pouring into the market, thanks to a coronavirus pandemic-induced stay-at-home culture. They want more space, both indoors and outside for both work and school from home.

Home price gains have been accelerating for the past three months, with some large local markets seeing double-digit annual increases. Nationally, the median price of a home sold in August (by closed sale) was 11% higher compared with August 2019, according to the NAR.

“Home prices are heating up fast,” said Yun. “The low mortgage rates are allowing buyers to secure cheaper mortgages, but many may find it harder to make the required down payment.”

Prices are mostly being fueled by an incredibly low supply of homes for sale. The inventory of homes for sale at the end of August was down 18.6% annually, putting the market at a 3.0-month supply.

“The increase in contract signings is shrinking the limited number of homes for sale to some of the lowest levels in recent history,” said George Ratiu, senior economist at realtor.com. “This is causing a massive imbalance to the market’s supply and demand, which is rewarding sellers with home price increases that more than double the pace of wages. Looking forward, with no signs of these dynamics shifting anytime soon, more price increases are likely on the way and affordability will likely continue to be a challenge for many buyers.”

Homebuilders are ramping up production, but not nearly fast enough. Sales of newly built homes in August, which are also measured by signed contracts, came in a remarkable 43% higher than August 2019, according to the U.S. Census. The homebuilders are benefiting from the lack of existing homes for sale, and their soaring sales are evidence that existing home sales would be higher if there were more on the market.

Regionally, pending home sales rose 4.3% month to month in the Northeast and were 26.0% higher annually. In the Midwest, sales rose 8.6% for the month and were up 25.0% from August 2019.

Pending home sales in the South increased 8.6% monthly and 23.6% annually. In the West sales rose 13.1% monthly and 23.6% annually.

~Diana Olnick, CNBC

Mortgage demand from homebuyers surges 40% from a year ago amid sales spree

The end of August usually marks the beginning of the slow season for housing, but as with everything else, this year’s trends are like no other.

Mortgage applications to purchase a home rose 3% last week from the previous week and were a stunning 40% higher from a year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. The year-on-year comparison is usually in single digits. While it may have been skewed slightly by the Labor Day holiday,which fell earlier last year, purchase demand is still running significantly higher than a year ago.

Buyers are still getting significant incentive from low mortgage rates. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances up to $510,400 fell to 3.07% from  3.08%, with points remaining unchanged at 0.36, including the origination fee, for loans with a 20% down payment.

For the 15-year fixed, the rate declined to a record low of 2.62% on conventional loans.

“There continues to be resiliency in the purchase market,” said Joel Kan, an MBA economist. “The average loan size continued to increase, hitting a survey high at $368,600. Highlighting the strong overall demand for buying a home, conventional, VA and FHA purchase applications all increased last week.”

Applications to refinance a home loan rose 3% for the week and were 60% higher than a year ago. Refinance volume has been extremely high since rates plummeted last March, but the pool of borrowers who haven’t already taken advantage of these low rates is shrinking.

The refinance share of mortgage activity increased to 63.1% of total applications from 62.5% the previous week. The adjustable-rate mortgage share of activity decreased to 2.2% of total applications.

~ Diana Olick, CNBC

Seattle-area home prices rise faster than nearly every other US city, driven in part by younger homebuyers

For the fifth month in a row, home prices around Seattle rose faster in June – 6.5%, year-over-year – than any of the nation’s other top 18 metro areas, save Phoenix, according to new data from S&P CoreLogic Case-Shiller Home Price Index. That’s more or less the same rate of growth we’ve seen since spring.

Price growth in King, Pierce and Snohomish counties topped national averages for the eighth month straight. National year-over-year home price growth of 4.3% in June pointed to a “stable” market, said S&P Managing Director Craig Lazzara in a statement. Prices rose in each of the 19 large cities that Case-Shiller tracks; among just those metros, year-over-year price growth averaged 3.5%. (Typically, Case-Shiller examines home prices in 20 metro areas, but data for the Detroit metro area has been unavailable since the start of the pandemic.)

A major imbalance between the number of homes for sale and a swell of interested buyers on the market has boosted prices. Until very recently, far fewer people were listing their homes than did in 2019. Many would-be sellers decided instead to take advantage of historically low mortgage rates to refinance their homes.

Price growth in the Seattle metro area has been driven by an uptick in cost for the area’s most affordable homes. Prices rose nearly 9% year-over-year among homes that sold for less than $448,069, which represent the most affordable third of all homes sold this spring. Among the most expensive third of homes, those selling for more than $670,317 – including most homes in King County, where a typical home now runs $727,500 – prices rose relatively more slowly, 5% compared to last year.

The lure of an under-3-percent mortgage has drawn younger buyers to the market, many likely for the first time. Across generations, only millennials are taking out more for-purchase loans than last year, according to data on VA loans from the Department of Veteran Affairs. The number of Seattle millennials who received for-purchase loans in the first nine months of the fiscal year rose 21.8% over the same period the previous year.

Refinances, however, have swollen a whopping 276% across all demographics, compared to the previous period.

Katherine Khashimova Long, The Seattle Times