Spokane home prices have held remarkably steady throughout 2023, even as local mortgage rates climbed a full percentage point higher than most financial analysts forecasted. Despite borrowing costs nearly doubling over the past year, tight housing inventory continues to support property values across Spokane County. For local buyers waiting on the sidelines for interest rates to drop, staying put may carry a much higher long-term cost than expected.
Pricing and Inventory Trends
Spokane housing prices have remained exceptionally stable in late 2023, failing to experience the price drops many buyers anticipated when mortgage rates doubled. While higher interest rates usually cool buyer demand, local housing inventory remains constrained across Spokane neighborhoods. Because overall supply is limited, sellers are not being forced to slash listing prices to attract serious buyers. In fact, if rates were to suddenly drop back down to the 6% range, the local market would likely see an immediate surge in competing buyers. That sudden increase in buyer demand would drive home prices up even faster, making waiting for price relief a risky strategy.
Mortgage Rate and Economic Context
Spokane mortgage interest rates are currently sitting about 1% higher than industry experts predicted for late 2023 due to persistent inflation. Trying to time interest rate drops in today’s economy is nearly impossible, as inflation data continues to keep borrowing costs elevated. However, buyers have options to manage monthly payments rather than waiting indefinitely. Temporary rate buy-downs can lower your interest rate for up to three years, while permanent buy-downs reduce your rate for the entire life of the loan. As Mike Hogan points out, purchasing real estate is like investing in Apple stock: the initial entry cost gets higher over time, but holding the asset builds long-term wealth that outperforms sitting in cash.
Advice for Home Sellers
Spokane home sellers are positioned well in October 2023 because persistent inventory shortages keep local home values protected from significant price declines. Since buyer demand remains steady among people relocating or expanding their families, well-priced listings continue to attract solid interest. You do not need to wait for interest rates to drop before putting your property on the market. In fact, listing now allows you to negotiate with serious, qualified buyers before potential rate drops bring unpredictable shifts to the market. To discover what your property is worth in today’s market, check out our Instant Spokane Home Valuation Tool.
Advice for Home Buyers
Spokane home buyers should focus on personal life needs and long-term equity growth rather than attempting to time unpredictable interest rate movements. Real estate decisions are fundamentally needs-based, whether you are preparing for a growing family, moving out of a rental, or downsizing. If you wait for interest rates to drop to 6%, hundreds of other buyers will jump back into the market at the same time, triggering bidding wars that drive purchase prices higher. Purchasing today allows you to secure your home’s price now, utilize rate buy-down programs to keep initial payments manageable, and refinance when borrowing costs eventually ease down the road. Keep an eye on our social media for upcoming updates on new Fannie Mae programs that make financing even more accessible. You can also compare today’s conditions to our September 2023 Spokane Real Estate Market Update.
Looking to buy or sell? Visit spokanehomeguy.com or call 509-990-SOLD (7653) to get started! If you have mortgage questions or want to explore rate buy-down options, call Mike Hogan at Chimney Rock Mortgage at 509-747-1300.
FAQ
Spokane home prices are expected to stay stable even if mortgage rates remain elevated. Because active housing inventory remains tightly constrained across local neighborhoods, limited supply prevents property values from dropping. If interest rates do fall, increased buyer competition is likely to drive home prices up higher.
Waiting for mortgage rates to drop to 6% can backfire by increasing competition. When interest rates drop, sidelined buyers re-enter the market simultaneously, triggering multiple offers and driving up home prices. Buying now locks in today’s purchase price, with options to refinance when rates eventually decline.
Spokane buyers can lower their monthly mortgage payments using temporary or permanent rate buy-down programs. A temporary buy-down lowers your interest rate for the first one to three years of the loan, while a permanent buy-down reduces your rate for the full 30-year term.
No, Spokane home prices have not experienced significant drops despite mortgage rates sitting 1% higher than expected. High borrowing costs have slowed total transaction volume, but low inventory continues to hold home values firm across Spokane County.
Rich and Mike recorded this month’s update on location at No-Li Brewhouse, situated right along the scenic Spokane River in Spokane’s historic Logan Neighborhood. Known for its expansive riverfront patio and vibrant local atmosphere, No-Li is a staple for craft beer enthusiasts across the Inland Northwest. Rich enjoyed their unique Pistachio IPA—a seasonal brew he affectionately called “the pumpkin spice of beer.” If you are looking for a great spot to enjoy local brews with a river view, No-Li is hard to beat.
