What Today’s High Prices and Mortgage Rates Mean for Buyers, Sellers, and Agents
Despite high mortgage rates and slower sales activity, home prices across the U.S.—and here in Seattle—remain at or near record levels. In fact, national median prices hit an all-time high in June 2025, even as sales volume dipped. For buyers, sellers, and real estate professionals, these conditions offer both challenges and opportunities.
National Housing Market Highlights
Seattle Housing Market Snapshot
Seattle proper: +5.17%
Seattle’s housing market is no longer overheated—but it’s far from cold. Prices remain historically high, though competition has softened. We’re entering a more balanced phase, where well-informed buyers and realistic sellers can find success with the right strategy.
Whether you’re planning to buy, sell, or invest, understanding how national trends and local shifts interact is essential in today’s market.
As a local mortgage broker serving the Seattle area, I’d be happy to walk you through today’s financing options, provide custom payment breakdowns, or help you evaluate your purchasing power in this unique market cycle.
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As mortgage rates begin to ease, many buyers are hoping for a break in home prices. But in Seattle, the reality may be more complex. A recent Investopedia article explores why lower mortgage rates might not result in cheaper homes—and here’s how that plays out locally.
1. The “Rate-Lock” Effect is Keeping Inventory Tight
Over the past few years, mortgage rates have remained in the 6.5%–7% range—well above the 3% rates many homeowners locked in during 2020–2021. In Seattle, this “rate-lock” phenomenon is especially pronounced. Homeowners are reluctant to sell and give up their historically low rates, which continues to restrict the number of homes on the market.
With fewer homes being listed, supply remains tight—keeping prices stable or rising despite broader economic conditions.
2. Buyer Demand May Surge Faster Than Sellers Return
If rates dip into the 5% range, it could trigger a wave of buyer interest—especially from millennials and Gen Z buyers who’ve been priced out in recent years. But while demand may rise quickly, homeowners may still hold back from listing until rates drop further. That imbalance could create more competition and, ironically, push prices higher.
Here in Seattle, bidding wars and fast-moving sales are still common. In fact, over 44% of homes went pending in under 30 days as of June 2025.
3. New Construction Can’t Keep Up—At Least Not Yet
Seattle has made strides with zoning reform since 2023 to allow for more housing options. But new construction takes time. Even with lower borrowing costs, builders face supply chain delays, labor shortages, and permitting timelines that slow the pace of new homes hitting the market.
So while construction may help long-term affordability, it won’t provide immediate relief in the current market cycle.
Seattle Market Snapshot (as of June 2025)
Bottom Line
Lower mortgage rates might improve affordability on paper, but they don’t guarantee lower home prices—especially in Seattle.
Why? Because when rates fall, more buyers jump in—but many sellers stay on the sidelines. That drives competition, which tends to keep prices strong.
If you’re a buyer, be ready. If you’re a seller, this may be your window to list while competition remains strong and values stay high.
In Seattle’s high-value real estate market, the best home renovations balance financial return with improved daily living. While minor updates often yield the greatest return on investment (ROI), major remodels can boost lifestyle quality and overall marketability.
Top ROI-Generating Upgrades (2024 Data):
In neighborhoods like Capitol Hill and Queen Anne, these updates enhance curb appeal and buyer perception.
When Bigger Renovations Make Sense: Major remodels—like custom kitchens or spa-style bathrooms—offer lower financial ROI (38–49.5%) but higher “lifestyle returns.” Features such as freestanding tubs, heated floors, and smart layouts can help homes sell faster and above asking price.
The Value of Working with a Designer: Hiring a skilled interior designer ensures cohesive planning, prevents costly errors, and connects homeowners to top-tier materials and trades. Designers bring vision, functionality, and long-term value to projects—something AI tools can’t fully replicate.
Emotional & Practical Benefits: Thoughtful renovations improve comfort, flow, and wellness, with features like universal design, natural light, and smart home integration. These improvements elevate everyday living while supporting future needs.
What Works in Seattle:
Seattle buyers want more than a house—they want a curated lifestyle. Homes that blend timeless design, local character, and livability stand out in this discerning market.
Bottom Line: Design is more than décor—it’s a long-term investment. Whether staying put or preparing to sell, well-planned renovations guided by professionals offer the strongest returns in both value and everyday enjoyment.
Timeless design is a bend of how your home looks, feels and functions (instead of trying to keep up with the latest trends). As we move into 2018, here are some tips on commonly remodeled parts of the house: the kitchen and the bathroom as predicted by Houzz:
Sinks: While porcelain will continue to be popular in bathrooms, there is a strong movement towards stone sinks in bathrooms. In the kitchen, stainless sinks appear to be on their way out. Expect to see more kitchen sinks made of stone, concrete and even copper. There will be more concrete, stone, copper and granite composite sinks in darker hues of gray, bronze or black. It brings back a feeling of simpler times that can be calming in a home environment.
Different colored kitchen cabinets: The trend is toward having upper cabinets in one color with lower cabinets in a contracting or complementary color (often tied together with the backsplash).
Tile: White subway tiles appears to be headed underground but tiles with intriguing designs, colors and patterns are in.
Kitchen Lighting: Kitchen lighting choices will vary depending on the style of kitchen. However, vintage style pendant light seems to be increasingly popular. Vintage light fixtures such as sconces, lanterns, pendants and chandeliers are making a come back as a crafty home do-it-yourselfers outfit retro fixtures with new technology.
More color in kitchens. Although white will always be a classic color for kitchen design, homeowners are shying away from bland hues and injecting rich colors such as warm wood tones - mahogany and neutrals - grays and blues.
With rising home prices and the cost of living climbing due to inflation and tariffs, affordability remains a top concern for prospective homebuyers. Yet despite these challenges, there are still practical strategies to help buyers make smart moves in today’s market. One of the most important things for buyers to understand is that home values tend to rise over time. Historically, the housing market has appreciated in value in all but a handful of years over the last eight decades – five of them took place between 2008 to 2013 and two in the 1950’s – where it was zero growth. Waiting for a market crash or better timing may lead to higher home prices down the road. Buyers who purchase now can always refinance if interest rates drop later—while locking in today’s home price.
For those concerned about upfront costs, down payment assistance programs can be a game changer. Rather than spending months saving a few thousand dollars—during which time home values may increase—buyers can use available programs to get into a home sooner and start building equity. Affordability also hinges on credit. Even for buyers with less-than-perfect scores, there are tools and resources to guide them through improving their credit and qualifying for a loan. Paying down credit cards or resolving collections can open the door to financing opportunities.
There are also signs the market may be shifting slightly in buyers’ favor. Inventory is up to its highest level in five years, homes are sitting longer on the market, and many are selling below asking price. Additionally, higher interest rates have motivated more sellers to offer concessions—giving buyers more negotiating power than they’ve had in recent years.
Despite the hurdles, there is opportunity in today’s market. With the right guidance, support, and programs, buyers can take meaningful steps toward homeownership and avoid the higher costs of waiting.
Is Homeownership Still Within Reach? For many in the Puget Sound region, homeownership has long symbolized stability and success. But in today’s market, that dream is becoming harder to achieve — even here in Seattle, a city known for its strong economy and high quality of life.
What it takes to buy a home in 2025? Nationwide, the median listing price hit $431,250 in April 2025. To afford a home at that price, a buyer needs to earn at least $114,000 a year — assuming a 20% down payment, a 30-year fixed-rate mortgage, and keeping monthly housing costs below 30% of gross income (a good rule of thumb). Just six years ago, that same home would have cost significantly less. In 2018, the median price was around $314,950, and mortgage rates hovered near 4.1%. Today’s average rate? A steeper 6.76%, which has pushed affordability further out of reach.
In Seattle, things are even more challenging. Seattle buyers face higher barriers - Seattle’s home prices are well above the national average. According to local MLS data, the median home price in King County in April 2025 officially reached $1 million — meaning the income needed to buy a typical home here often exceeds $180,000–$250,000 per year, depending on your down payment and debts. For many buyers, particularly first-timers, that’s a tall order.
Seattle isn’t alone. In other major metros like San Francisco, San Jose, and Boston, the income needed to afford a home tops $200,000 annually, and in some areas, it’s over $370,000.
How did we get here? During the pandemic, record-low interest rates ignited a buying frenzy across the country — and Seattle was no exception. Bidding wars were the norm. Some homes sold for hundreds of thousands over asking. Prices surged more than 50% between 2019 and 2024. But when rates began climbing in 2022, the market shifted. Sales slowed sharply. In fact, 2023 saw the lowest volume of U.S. home sales in nearly 30 years.
What should buyers in Seattle do? If you're hoping to buy in the Seattle area this year, preparation is everything. Here are a few smart steps:
Even in a market with elevated prices and rates, there’s opportunity for savvy buyers — especially as sellers become more realistic and inventory continues to grow.
Thinking about buying this year? Let’s talk. We’ll help you understand your numbers, compare loan options, and put together a game plan for success — right here in the Seattle market or in anywhere else in Washington.
April 2025 - Seattle’s Million-Dollar Homes Now Entry-Level for Buyers
Seattle, once known for modestly priced homes and thriving neighborhoods, has seen the cost of single-family houses rise to staggering new heights. Today, $1 million affords what many would consider an entry-level home — typically an older, smaller residence, often requiring repairs or updates.
In today’s market, even with a budget exceeding $1 million, buyers often struggle to find a suitable home within desirable communities such as Greenwood, Phinney Ridge, and Ballard. In a city where the median price for a single-family home now stands at exactly $1 million, compromises on size, condition, or location are now common. Areas like Beacon Hill, West Seattle, and Southeast Seattle offer slightly more affordable options under $1 million, while Eastside suburbs like Bellevue and Mercer Island are far more expensive, with median home prices well over $2 million.
According to data from the Northwest Multiple Listing Service and Zillow, today’s million-dollar homes are markedly smaller than in years past, and competition remains fierce for well-situated properties. Homes located near public transit and amenities tend to attract multiple offers, while condominiums and townhouses see less buyer enthusiasm.
Seattle’s high cost of land and construction continues to limit the building of traditional detached homes, with many builders turning instead to townhomes and condominiums. Consequently, buyers who wish to remain within city limits must adjust their expectations or prepare to spend considerably more.
Even tear-down properties now often command prices exceeding $1 million, driven largely by the value of the land itself.
Despite the challenges, the desire to own a home within Seattle remains strong — a reflection of the enduring appeal of urban living and the lasting spirit of homeownership.
Seattle has lost a significant amount of affordable housing, particularly in the 2010s, leading to a dramatic rise in homelessness. In 2014 - the transformation of Panaroma House, an 18-story apartment building on First Hill, when new owners evicted tenants, renovated the building, and double rents - part of citywide trend where older, once affordable apartments became unaffordable.
A surge in apartment construction in the 2020s temporarily slowed rent increases, improving affordability for middle-income renters. However, construction costs, high interest rates, and lower housing permits in recent years could lead to renewed housing shortages and rent hikes, putting more people at risk of homelessness.
Without continued housing development, Seattle could repeat past trends, forcing its most vulnerable residents out of the market.
A year has passed since a landmark legal settlement promised to disrupt the way real estate commissions are structured in the US, but home sellers say they are still feeling pressured to pay excessively high fees. The National Association of Realtors (NAR) had agreed to end a long-standing practice of sharing commission information privately among agents through MLS databases. The settlement aimed to increase transparency and competition, potentially lowering commissions historically set between 5% and 6%.
Here's how the settlement has impacted the industry since then:
Overall Market Impact – While commissions may moderate, the settlement is not expected to significantly affect home prices or inventory, as interest rates and supply-demand dynamics remain the primary market drivers.
Buyer-broker agreements explain the duties and responsibilities of the parties and set out exactly what services the broker will provide. There are several types of buyer's broker real estate agreements representing the nature of the relationship between the buyer and the broker. These contracts can generally be provided by the broker in preprinted "fill-in-the-blank" forms adapted to the laws of the particular state. There are three common types of contracts between homebuyers and real estate brokers:
Buyers should evaluate their options based on exclusivity, contract duration, compensation, and home search preferences. Consulting professionals and comparing brokers can help buyers make an informed choice.
More information from NAR FAQs here.
Sweeping changes to the way realtors conduct business came into effect across the US last Saturday (8/17/24) that could have significant knock-on impact on the mortgage and housing markets. The new law now requires homebuyers to negotiate directly with their selling agents regarding payment of fees while sellers are no longer required to offer to cover the cost of the buyer's agent.
In November 2023, a federal jury in Missouri ruled that the National Association of Realtors, a powerful real estate organization that owns the trademark to the title Realtor and controls much of its members’ activities, and several other large brokerages conspired to inflate agent fees. This ruling will force buyers to negotiate a fee with their agent and it will make it easier for lower-priced agents to catch the attention of buyers and lead to greater price competition. But some argue that this case could leave most Seattle-area homebuyers to fend for themselves in an ultracompetitive and pricey market and that homebuyers to shell out more money upfront to buy a home. If co-op fees are prohibited, homebuyers might have to pay their agents out of pocket. This will further erode purchasing power for our veterans, minority buyers, and first-time homebuyers who are struggling for loan qualification to begin with.
In March 2024, the National Association of Realtors (NAR) reached to a Settlement Agreement to resolve a series of lawsuits against the organization. The key issue in the lawsuits was the practice of "tying," whereby NAR members require the commissions paid to buyers' agents to be set by the seller's agent. When a home is listed under tying agreements, the compensation for a buyer's agent is established before the buyer can be sure of the quantity or quality of their services their agent will provide. Tying also means that sellers may have to offer higher commission to maximize the chance they sell their home through the practice of "steering." If the agreement is approved, tied compensation will no longer occur on MLSs. Furthermore, buyers and their agents will have to explicitly agree about what services agents will provide, online MLS databases will no longer display commission rates, and NAR will also be required to permit real estate agents to be paid for their work without subscribing to MLS.
Here in Washington state and the Northwest Multiple Listing Service (NWMLS) which serves most of Washington have already made several changes to make the system more consumer-friendly. In 2020, NWMLS, which is not affiliated with the National Association of Realtors or subject to its rules started publishing agent commissions on its webpage. The seller is also not required to offer the buyer’s agent a fee – which is a key issue in the federal class action lawsuit. On January 1, 2024, important revisions to the law that governs real estate brokerage relationships (RCW 18.86) in Washington State – otherwise known as the “Agency Law” – become effective. These are the first significant revisions since the Agency Law took effect in 1997. The revisions, which are explained in detail in this bulletin and set forth in Senate Bill 5191, include the following:
NWMLS revisions to the state’s Agency Law will require agents to have a written agreement between buyers and sellers that spell out the scope of the agent’s services and compensation. Here's more information on Form 41.
Please keep in mind that in addition to a fully filled out form 41(buyer agency agreement), both fields on Line 17 (on form 21) must be fully filled out completely. Attention Buyer Brokers: You must complete both the "Seller's Offer (if any)" AND the "Amount to be Paid by Seller" fields. On page one of the purchase and sale agreement, the specific term titled “Buyer Brokerage Compensation” displays two fields: the “Seller’s Offer (if any)” and the “Amount to be Paid by Seller.” Both of these fields must be completed and should not be left blank.
The “Seller’s Offer (if any)” is a statutory disclosure required so the buyer knows how much the seller is offering, if anything.
The “Amount to be Paid by Seller” specifies how much the seller will pay toward the buyer brokerage firm compensation at closing.
Both fields must be completed even if the amount of the “Seller’s Offer” (e.g., 2.0%) is the same as the “Amount to be Paid by Seller” (e.g., 2.0%).
Please see below examples:
Example A: On page one of the purchase and sale agreement, the specific term titled “Buyer Brokerage Compensation” displays both the “Seller’s Offer (if any)” and the “Amount to be Paid by Seller.” Both of those terms must be completed and should not be left blank. This is true even if the amount of the “Seller’s Offer” (e.g. $7,000) is the same as the “Amount to be Paid by Seller” (e.g. $7,000).
Example B: If the “Seller’s Offer” is greater than the “Amount to be Paid by Seller”, the buyer can request a credit toward buyer’s obligations at closing. To do this, fill in the amount of “Seller’s Offer” (e.g. $7,000) and the “Amount to be Paid by Seller” (e.g. $5,000). Check the “Addendum for Buyer Credit” box and attach and complete the Addendum for Buyer Credit (Form 41C) for a $2,000 credit to the buyer.
*Note, if the buyer is not requesting a credit in this scenario, do not check the Addendum for Buyer Credit box and the seller would only pay $5,000.
Example C: If the “Seller’s Offer” (e.g. $7,000) is less than the amount that the buyer has agreed to pay in the buyer brokerage services agreement (e.g. $9,000) – and the buyer requests that the seller pay the additional buyer broker compensation, fill out the terms accordingly.
Example D: If the seller is not offering any buyer brokerage compensation – and the buyer requests that the seller pay all or a portion of the compensation that the buyer has agreed to pay in the buyer brokerage services agreement (e.g. $6,000), fill out the terms accordingly.
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Mortgage applications surged 11.2% last week, continuing a strong start to the spring homebuying season, according to the latest Mortgage Bankers Association (MBA) report. Falling mortgage rates have fueled demand, with the average 30-year fixed rate dropping to 6.67%, its lowest level since October 2024.
The March MCT Indices Report showed a 27.91% increase in mortgage lock volume, aligning with seasonal trends. Analysts expect continued strength in mortgage activity through March and April, with possible slowing in the summer.
Looking ahead, market watchers anticipate the Federal Reserve will hold rates steady in March and May, with a potential rate cut in June, depending on economic indicators like tariffs, Nonfarm Payroll, and inflation data.