The Spokane housing market saw inventory surge 40% year-over-year this September, pushing active listings to over 3,400 homes. Meanwhile, the median home price dipped slightly to $410,000. With homes staying on the market longer, buyers are finally finding room to breathe and negotiate.
Pricing and Inventory Data
Spokane’s median home price currently sits at $410,000, representing a 3.5% drop compared to this time last year. Active housing inventory spiked by 40% year-over-year, bringing the total to over 3,400 available homes. New listings are up 13.5%, keeping that inventory relatively high.
Because we have more homes available, the pace of the market is slowing down. Specifically, our absorption rate dropped from 26% down to 19% this month. This means fewer than one in five active homes went under contract. September is historically a slower month for real estate anyway as families settle into the school year, but the combination of high inventory and fewer quick sales is creating a noticeable shift.
Rate and Economic Context
Mortgage rates are hovering in the low to mid-6% range, making the average cost of a mortgage about 1% cheaper than it was a year ago. That drop equals roughly a $20 per month savings for the average buyer.
September was actually one of the best months for rates we have seen in the last year. Rates did not experience crazy spikes and crashes. Instead, they stayed fairly steady, which is exactly what home buyers need when locking in a loan. If you get quoted a rate on Monday, it is nice to know it will still be there when you write an offer on Friday!
The Truth About Fed Rate Cuts
The recent Federal Reserve rate cut did not lower 30-year mortgage rates, and in fact, mortgage rates trended slightly upward immediately after the announcement. It is a classic case of “buy the rumor, sell the news.”
When the market expects a rate cut, traders price that expectation into mortgage rates weeks before the Fed actually meets. If you wait for the official announcement to lock your rate, you have already missed the boat. For example, between July 2023 and September 2024, the Fed did not cut rates at all, yet mortgage rates naturally dropped from 7.8% to 6.2%. When the Fed finally announced a 50-basis-point cut in September 2024, mortgage rates actually jumped up to 6.9%. If you really want to track where mortgage rates are heading, you should watch inflation, the 10-year Treasury note, and oil prices instead of the Federal Reserve.
Why ARMs Are Making a Comeback
Adjustable-rate mortgages like the 5/1, 7/1, and 10/1 ARM are making a major comeback by offering buyers significantly lower interest rates for their first five to ten years in a home. For example, we recently saw a buyer choose between a 4.99% fixed rate or a 7-year ARM at just 3.875%. The lower ARM rate beat out a massive $15,000 price reduction!
People often fear ARMs because of the 2008 crash, but today’s loans come with strict adjustment caps to protect buyers. More importantly, the average homeowner only stays in their mortgage for five to six years before selling or refinancing anyway. So if you are only keeping the loan for six years, a 7-year ARM gives you a massively discounted monthly payment with zero risk of the rate adjusting while you hold it.
Advice for Sellers
Spokane sellers must prioritize price and condition above all else, as the absorption rate has dropped to just 19% of active listings. That means only about one in five homes is going under contract quickly.
You cannot out-market an overpriced or poorly conditioned home. Period. Buyers have over 3,400 other homes to look at, so they will absolutely skip yours if it needs work or feels overpriced. You have to prepare for your home to sit a bit longer, and you need to be open to negotiating seller concessions or price reductions. Home Valuation page.
Advice for Buyers
Spokane buyers currently have 40% more inventory to choose from, completely eliminating the FOMO and bidding wars of past years. You have real options right now, so you can take your time to make a confident decision.
Do not just ask for a price drop when negotiating. You can actually ask the seller for concessions to buy down your mortgage rate. For example, conventional loans allow up to 6% in seller concessions if you put 10% down. Buying your rate down into the 5% range will save you far more money every month than a standard price reduction ever could. Previous month’s update.
Looking to buy, sell, or invest? Visit spokanehomeguy.com or call 509-990-SOLD (7653) to get started! If you want to review your specific borrowing options like an ARM or a DSCR loan, reach out to Mike Hogan at Chimney Rock Mortgage at 509-747-1300 or visit chimneyrockmortgage.com.
Frequently Asked Questions
The median home price in Spokane sits at $410,000 as of September 2025. This reflects a 3.5% decrease compared to last year. While prices have softened slightly, active inventory has grown significantly, making it an excellent season for buyers to negotiate.
Yes, active housing inventory in Spokane jumped 40% year-over-year, bringing the total to over 3,400 available homes. New listings also rose 13.5%, giving local buyers significantly more choices and eliminating the frantic bidding wars we saw in previous years.
No, a Federal Reserve rate cut does not directly lower 30-year mortgage rates. Mortgage rates are actually tied to long-term economic indicators like inflation, oil prices, and the 10-year Treasury note. In fact, mortgage rates often tick upward right after a Fed announcement.
Homeowners average five to six years in a mortgage before either selling the home or refinancing into a new rate. Because most buyers never keep their original 30-year loan for the full term, adjustable-rate mortgages (ARMs) can be a smart way to secure lower initial payments.
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