Whatcom Real Estate reacting to the mortgage rates staying high

Whatcom County real estate has still been strong despite thehopes among potential home buyers and sellers, as well as economists’ predictions, the Federal Reserve Bank’s three interest rate cuts in 2024 have not led to reduced mortgage rates or a significant boost in the housing market. Instead, as of January 2, 2025, mortgage rates have risen to 6.91%, their highest level since July 2024.  Yet homes in our area continue to list and sell.

“The 30-year mortgage interest rate was actually higher at the end of 2024 (6.85%) than at the end of 2023 (6.61%),” said Steven Bourassa, director of the Washington Center for Real Estate Research (WCRER) at the University of Washington. He anticipates that mortgage rates will continue to frustrate the market. “We may well be experiencing the pains of adjusting to a new normal, with persistent interest rates of 6% or higher.”  We will continue to keep our ear to the ground for more information.  There are plenty of resources our buyers should look into to help offset these additional costs.

Rising rates have been accompanied by a 4.3% increase in home prices over the past year, further exacerbating affordability challenges. However, the market has shown some signs of increased activity. Active listings and sales transactions were up by 25% and 19.8%, respectively, in December 2024 compared to the previous year, suggesting that buyers and sellers may be adjusting to higher borrowing costs.  Many consumers are becoming more aware of the ability to shop their interest rates and loan terms to help them with every dollar toward their next home purchase.

While affordability remains a significant concern, these trends point to a gradual adaptation to the evolving landscape of the housing market.