Spokane housing inventory surged by nearly 40% in July 2025, driving available housing supply up to 4.8 months. This rapid increase officially transitions our local market out of a seller’s market and into balanced territory for the first time in years. As buyer demand cools slightly and inventory climbs, home buyers and sellers face a shifting real estate landscape across the Spokane region.
Spokane Inventory Surges into Balanced Territory
Spokane’s housing supply reached 4.8 months in July 2025, up 36% from 3.6 months in June, marking our official transition into a balanced real estate market.
For nearly a decade, Spokane has been locked in a strong seller’s market. But in July alone, active listings skyrocketed by almost 40%. On top of that, our absorption rate fell to 21%, meaning only one out of every five homes listed went under contract during the month. The remaining 80% of active homes are sitting on the market longer, which extends average days on market across the county. A balanced market acts as a transition point, so we need a major catalyst to push us back toward sellers or further into buyer territory. (And hey, as GU basketball season approaches, we are at least getting ready for that Gonzaga ticket contribution bill!)
Will Mortgage Rates Ever Drop Back to 3%?
Mortgage rates are unlikely to return to 3% anytime soon because the Federal Reserve is actively reducing its balance sheet rather than purchasing mortgage-backed securities as it did during the pandemic.
We hear this question constantly from local buyers: are 3% mortgage rates coming back? The short answer is no. The only reason rates dropped to historic 3% levels in the past was quantitative easing, where the Fed bought massive volumes of Treasury notes and mortgage-backed securities. Today, the Fed is selling off those assets, which pushes long-term interest rates higher and puts pressure on inflation. Even if the Fed drops the overnight benchmark rate by half a point this autumn, mortgage rates won’t drop half a point right behind it. In fact, mortgage rates often react negatively for a day or two before settling back down.
Spokane Seller Strategy: Pricing Ahead of the Market
Spokane sellers should price their homes 3% to 5% below recent comparable sales from 3 to 6 months ago to align with higher inventory and slower absorption rates.
If you are listing a house right now, relying on pricing data from spring or last winter will leave you chasing the market down. Homes in Spokane doubled in value over just seven years, which is roughly three to five years ahead of historical appreciation trends. Because inventory is up and fewer buyers are jumping in immediately, hitting the right price in your first 30 days is critical. If you miss that initial launch window, your listing risks sitting on the market without an offer while competing listings grab the few active buyers.
Spokane Buyer Strategy: Creative Financing and Negotiation Power
Spokane home buyers currently hold significantly more negotiating power, allowing for aggressive price reductions, seller-paid closing concessions, and specialized financing tools.
With 80% of active listings sitting without an offer, buyers can finally negotiate on price and request seller concessions for closing costs or rate buydowns. Plus, don’t let credit score myths or income assumptions hold you back from exploring your options. Investors can leverage Debt Service Coverage Ratio (DSCR) loans that qualify based on property rental income rather than personal tax returns—some local investors are cash-flowing $1,000 a month even at 7% or 8% interest rates. Retired buyers can also use asset depletion programs or 5-to-10-year interest-only loan structures to optimize cash flow while building long-term equity.
Looking to buy or sell? Visit our Spokane Home Valuation Page or call 509-990-SOLD (7653) to get started!
Frequently Asked Questions About the Spokane Housing Market
Spokane is currently in a balanced market as of July 2025. Housing supply climbed to 4.8 months, breaking a decade-long seller’s market. In a balanced market, neither buyers nor sellers hold complete leverage, creating opportunities for aggressive buyers while requiring sellers to price competitively from day one.
A Federal Reserve rate cut does not directly lower mortgage interest rates by the same amount. The Fed controls the short-term overnight rate, while mortgage rates track long-term Treasury yields and mortgage-backed securities. Often, mortgage rates fluctuate briefly after a Fed rate cut before stabilizing based on broader market conditions.
Sellers in Spokane should price about 3% to 5% lower than comparable home sales from 3 to 6 months ago. Because inventory jumped 40% in July 2025, pricing slightly below recent comps helps attract buyers during the crucial first 30 days on market before competing listings absorb demand.
A Debt Service Coverage Ratio (DSCR) loan allows real estate investors to qualify for a mortgage based solely on the rental income generated by the property, rather than personal tax returns or employment history. This makes it an ideal financing option for self-employed individuals, business owners, or retirees expanding their rental portfolio.
