Spokane median home prices slipped 6% to 7% in December 2023, while mortgage rates dropped more than 1.25% from their October highs of 8%. Low housing inventory kept overall pricing stable year-over-year, setting up a far more favorable environment for buyers and sellers as we head into 2024. Mike Hogan from Chimney Rock Mortgage joined Rich to break down what these shifting rates and inventory trends mean for your next move.
Pricing and Inventory Trends
Spokane median home prices dropped between 6% and 7% in December 2023 compared to November, leaving prices flat to down 1% to 2% year-over-year. However, extremely low inventory levels continued to protect home values from sharper declines. In fact, strong wage growth over the past year combined with stable home prices has significantly improved local housing affordability. A recent industry survey revealed that over 70% of respondents expect home prices to remain steady or rise slightly in 2024. So while prices dipped seasonally in December, short supply continues to anchor market stability.
Mortgage Rate and Economic Context
Spokane mortgage rates have fallen more than 1.25% since reaching 8% in October 2023, bringing standard rates into the low 6% range. Plus, buyers using mortgage rate buy-downs can currently secure rates with a 5 in front of them. This drop is driven by stabilizing mortgage-backed securities as inflation continues to cool down toward the Fed’s 2% target. During its recent meeting, the Federal Reserve projected three separate 0.25% rate cuts for 2024, totaling 75 basis points in cuts. As a result, analysts expect mortgage rates to drop another 0.25% to 0.50% over the coming year. But buyers waiting for 3% interest rates to return will likely be disappointed, as those pandemic-era lows are not coming back. You can see how this compares to previous trends in our December 2023 Spokane Real Estate Market Update.
Advice for Home Sellers
Spokane home sellers can expect steady property values and solid buyer demand in 2024 because inventory remains tightly constrained. If you plan to sell this year, you do not need to fear a market crash. In fact, more than 70% of consumers surveyed expect housing prices to stay flat or increase. As mortgage rates continue to ease, more buyers will jump off the sidelines and enter the Spokane market. This increased buyer activity will create more competition for well-priced homes. To find out what your property is worth in today’s shifting market, check out our Instant Spokane Home Valuation Tool.
Advice for Home Buyers
Spokane buyers have a unique window of opportunity right now as lower interest rates and steady prices create improved overall affordability. Trying to time the real estate market perfectly is nearly impossible, even for professionals. But buying now allows you to avoid the intense competition that will happen if rates fall further into the 5s. Plus, steady mortgage-backed securities mean interest rates are much less volatile than they were in 2023. You can negotiate price or seller-paid closing costs today, then refinance if rates drop down the road.
Looking to buy or sell? Visit spokanehomeguy.com or call 509-990-SOLD (7653) to get started! If you have mortgage questions, you can also reach Mike Hogan at Chimney Rock Mortgage at mhogan@chimneyrockmg.com.
Frequently Asked Questions
What happened to Spokane home prices in December 2023?
Spokane median home prices slipped 6% to 7% in December 2023 compared to the previous month. This put overall real estate prices flat to down 1% to 2% year-over-year. Low inventory levels helped keep overall home values stable despite the seasonal month-over-month decline.
How much have Spokane mortgage rates dropped since their 2023 peak?
Mortgage rates have fallen over 1.25% since hitting highs of 8% in October 2023. Rates currently start in the low 6% range, and buyers can often secure interest rates in the 5% range using temporary or permanent rate buy-down programs.
Will mortgage rates go back down to 3% in 2024?
No, mortgage rates are not expected to drop back to 3% COVID-era lows. While the Federal Reserve projected three rate cuts totaling 75 basis points in 2024, experts anticipate this may lower mortgage rates by roughly 0.25% to 0.50% rather than triggering massive drops.
Is early 2024 a good time to buy a home in Spokane?
Yes, early 2024 presents strong buying opportunities due to lower interest rates and solid wage growth. Purchasing now allows buyers to build home equity before lower interest rates attract more competing buyers and potentially drive home prices back up.
