Recent market conditions have managed to push rates back down again to two year lows. Buyers should be cautious when looking at online rates as they often reflect a national average and regional rates vary considerably. The Pacific Northwest region is generally higher than the national average by as much as a quarter point. That said, rates are at two year lows right now and that means buyers have just gained some purchasing power.
With rates nearly a full point lower than this time last year, a buyer that qualified for $300,000 last year can probably get closer to $340,000 this year! Housing prices have NOT gone up that much over the last year so this is a huge positive for buyers.
Just to be clear, if a buyer was quoted a 5% rate last year and qualified to buy a $300,000 house. That same buyer will qualify for a $337,000 house at 4%. Year over year that $300,000 house last year would sell for maybe $310,000 today in our local market. Home affordability is better this year than last year due to the rate value exceeding the appreciation value.
All buyers that were frustrated with conditions in the last couple of years ought to get back in the game before the market reacts to the lower rates and prices start heading up again. For now, prices are stable, inventory is decent and rates are low. This is a window of opportunity that may close soon.