Whereas Amazon may be tempering their growth in the Emerald City, they’re increasing their footprint. 10 miles away across the Lake is the City in a Park (Bellevue – who knew that was their nickname?) So fear not my friends! Looks like tech is continuing its growth trajectory here in the great Northwest.
Why This Is Good News For the Puget Sound, and Its Housing Market
Tech has been one of the biggest drivers of Seattle’s housing market appreciation over the last 10 years. Thanks to tech, Seattle now ranks in the top 10 for net worth nationwide at just about $400,000 per the average Seattleite. With that said, the disparity in wealth between homeowners and nonhomeowners is large.
The average Seattle homeowner has a net worth of $898,000. The average Seattle renter has a net worth of $36,000. This is EXACTLY why there are so many incredible homebuyer programs to stimulate homeownership: Because owning a home is the single greatest thing someone can do to increase their wealth. (Shameless plug: PRMI crushes it when it comes to first-time homebuyer programs, and getting people with little to no down payment into homes.)
The more the big tech titans grow, the better the future looks. Microsoft and Amazon aren’t just great for the wealth they bring to the region. They’re great because they bring a lot of really smart people to the region as well. People who then start other really successful companies, which increase the Seattle tech footprint and overall regional wealth even further! Cranium, Glassdoor.com, Real Networks, and Zillow.com were all started by former Microsoft employees. Just imagine what future brain-children might be born out of Amazon’s current 45,000 employees, and Microsoft’s current 42,000 employees.
It’s Not Just Amazon and Microsoft
Boeing is CRUSHING it even more than maybe the tech companies are. They recorded their best year EVER last year, beating their previous best year ever which was 2017. Boeing delivered 806 planes in 2018, with well over half of those being the Renton built 737 single-aisles. Not only did they deliver 806 planes in 2018, they also ADDED 893 new plane orders worth $143.7 BILLION dollars in 2018! Their order backlog is now 7 years long. Talk about some job security for Puget Sound’s number one employer of 80,000 people.
Interest Rates Hit Their 12 Month Low!
Interest rates have fallen. Housing prices are off their record highs. The Puget Sound economy is STRONG. And homeownership is far and away the biggest driver of lifetime wealth. Not a bad climate for prospective homebuyers to buy into.
There’s a window from about early September through December 2018 where the average interest rate per Bankrate.com’s national survey hovered right around 5% with .30 bps in origination. According to the Bankrate.com survey this week, rates are at their lowest point in 12 months – sitting at 4.52% with .37 in origination.
If you have prospective buyers who have yet to make a move due to the higher interest rate climate, well, things have corrected themselves. Moreover, if you have buyers who bought last fall and you’re looking for a reason to check back in with them to see if they have any friends/colleagues/contacts who may be interested in purchasing this year, calling on the premise of lower interest rates and to take a look at a refi might not be a bad icebreaker.
Per Bankrate.com, the 30 Year Mortgage interest rate fell to 4.52% with .37 in discount and origination points.
RATES ARE AT THEIR 1 YEAR LOW!!!
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage fell this week to 4.52% from 4.54%, according to Bankrate’s weekly survey of large lenders. A year ago, it was 4.52%. Four weeks ago, the rate was 4.62%. The 30-year fixed-rate average for this week is 0.58% points below the 52-week high of 5.10% and is identical to the 52-week low of 4.52%.
The 30-year fixed mortgages in this week’s survey had an average total of 0.37 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 4.74%. This week’s rate is 0.22 percentage points lower than the 52-week average.
- The 15-year fixed-rate mortgage fell to 3.93 % from 3.94 %.
- The 5/1 adjustable-rate mortgage fell to 4.20 %from 4.21 %.
- The 30-year fixed-rate jumbo mortgage was flat at 4.47 %.
- At the current 30-year fixed rate, you’ll pay $507.87 each month for every $100,000 you borrow, down from $509.06 last week.
- At the current 15-year fixed rate, you’ll pay $736.18 each month for every $100,000 you borrow, down from $736.68 last week.
- At the current 5/1 ARM rate, you’ll pay $489.02 each month for every $100,000 you borrow, down from $489.60 last week.
Results of Bankrate.com’s weekly national survey of large lenders conducted Feb. 20, 2019, and the effect on monthly payments for a $165,000 loan:
The “Bankrate.com National Average,” or “national survey of large lenders,” is conducted weekly. The results of this survey are quoted in our weekly articles and national media outlets. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans, and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. https://www.bankrate.com/mortgages/analysis/
These charts are Seattle Specific, but the Puget Sound Real Estate Market mirrors the Seattle market.
Scott Sheridan is a Loan Officer with Primary Residential Mortgage, Inc. Being in the mortgage industry for three years, Scott brings a fresh millennial flair to the industry. He is well-versed in the most modern, efficient, and convenient ways to get things done. Scott combines these skills with a genuine love of his work and recent experience in what is it like to be a first and second-time home buyer. You can follow Scott’s weekly market updates on his PRMI Facebook Page.