Winter 2025 Real Estate Market Update
| 2025 Q1 Market Update |
| As 2025 kicks off the good news is we have not had the recession that many warned about and feared. However we do have persistent inflation, which is unlikely to go down in the short term. Therefore it is forecasted that the Federal Reserve will keep rates stable but on the higher end until the end of the year, averaging in the mid to high 6% range. It’s expected that rates will not drop into the 5% range in 2026, although some say by the end of 2025. In January this past month rates jumped to over 7% for a 30-year fixed loan making it difficult for homeowners keeping buyers and seller’s cautious for the near future. The Federal Reserve has indicated it will have fewer rate cuts then anticipated in the Federal Funds rates, most likely 2 this year instead of 4, skipping January, and a predicted drop in February. Many folks are concerned about tariffs and it’s impact on the building industry. It is now unclear if those tariffs will come to fruition, but what we do know is about 42% of our construction materials are imported. Increases in prices would certainty drive up the cost of new construction. There is also concern about deportations because 34% of the construction workforce is made up of immigrants. Current deportations are already impacting labor availability. It is still a seller’s market as low inventory keeps prices high, with a 10% modest growth on prices throughout the Seattle market in 2024. Low inventory is likely to continue as long as the rates stay high. According to economist Mathew Gardner 4 out of 5 mortgages in our state have an interest rate of 5% or lower. Most folks need rates to come within 1.5% difference from their current rate to think about moving. Click here to see a powerpoint of Gardner’s 2025 Economic Forecast. |