2025 Q2 Market Analysis

Q2 Housing Market Review

Tiffany Holden-Ng | Bellingham Real Estate Co.

New listings

Our Q1 market review reported the strongest March in terms of new listings for the last few years, and mentioned this as a possible indicator for a strong spring listing season.

And yes, that happened. 

Q2 brought with it a surge of new listings to Whatcom County’s inventory; 26% higher than last year’s turnout. 1,337 single family homes (not including condos and manufactured homes) came on the market, the highest number of new listings in the second quarter since June 2017 (June 2022 came in at a close second).  

Approximately a third of these new listings (437) were in Bellingham (as defined by MLS Area 860), and just like the county as a whole, this was the highest number of new residential listings in Q2 since 2017. 

As of this report (written on July 2, 2025), there are 816 single family residential homes available for sale on the Northwest MLS in Whatcom County, and more than a thousand including condos and manufactured homes. 206 single family residential homes are available for sale in Bellingham, with a median list price of $907,500. 

To sum up: a whole lot of houses came on the market; the highest Q2 we’ve had in 8 years.

Closed sales

641 single family homes closed in Q2 in Whatcom County, which ties with Q2 of 2024 as the lowest number of Q2 closings in a decade. 2014 and 2015 saw a surge as our community recovered from the Great Recession, and the numbers stayed strong until the 2022 interest rate increases that continue to contract the housing market.

Our historical Q2 sales peak was 2017, and sales this year are down 26% compared with that year. However, over the last decade, July through September have been the peak closing months in our county, so next quarter’s numbers will be particularly telling.

Bellingham followed suit, with just 285 homes closed this quarter. The last time we saw such a low closing number in the second quarter was way back in June 2012.

To sum up: this year had the lowest number of Q2 closings for the last decade or more.

Expired & cancelled listings

While having hundreds of homes entering the market each month gives plenty of options for buyers, it also means that with today’s limited buyer pool , more sellers are having a hard time competing with other quality properties in attractive locations. 

In Whatcom County, 239 homes fell off the market, unsold, in Q2. 42 (nearly a fifth) of these were on the market longer than 6 months; ten homes were on the market a full year or more and still didn’t sell. The median asking price of canceled/expired listings was $869,000, more than $200,000 higher than the median closed price.

This means that for every 5.6 homes that came on the market, 1 fell off, unsold.

And 1 home fell off the market for every 2.7 that closed. Only three-quarters of the homes coming off the market actually sold.

In Bellingham, 110 listings were cancelled or expired. This is almost an exact 1:4 ratio between failed listings and new listings coming on the market–meaning that for every 4 homes that were newly listed this quarter, one was cancelled or expired. 

Keep in mind that a large segment of the market are homes that have been on the market for several months; this doesn’t mean that the homes cancelling or expiring were listed recently. Older listings are competing constantly with wave after wave of fresh listings for the limited pool of qualified buyers.

What this means for consumers

With 2 houses coming on the market for every home sold, buyers overall have more options. Sellers are competing first with one another, to have the best-priced, best-maintained, best value in their specific market niche. 

However, buyers are fighting to get into the active market, and we’ve seen cases of multiple-offer situations on some of the well-priced, most attractive homes. What we do know is that today’s economic uncertainty, the increase in the cost of basic goods and services, and interest rates staying stubbornly over 6% for 2.5 years, have all led to an environment where many buyers have been entirely edged out of the market, and where many mortgage payments are double what they would have been just three years ago.

In Summary

Even as data shifts and markets morph over the years, our recommendations often echo the same themes:

Hire a professional agent who will provide detailed analysis (whether you’re buying or selling) and be able to explain it to you.

Sellers: know your competition and prepare your home to be the best it can be on the market.
 Buyers: work to improve your buyer profile (and it’s okay to have a consultation or two or three as you’re doing so!) and be realistic about what’s possible.

Tiffany Holden-Ng is a licensed Managing Broker at Bellingham Real Estate Co, 2900 Meridian St. AI is never used in the research or generation of Tiffany’s analyses.

Data and information derived from the Northwest MLS.

_______________________________________________________________

Q2 Economic Report

Luis Gonzalez | RWM Home Loans - Bellingham

The U.S. mortgage market stabilized in early 2025, with the average 30-year fixed mortgage rate declining modestly from 6.91% on January 2 to 6.77% on June 30 (Freddie Mac). In that time, volatility decreased significantly as compared to 2024. Now, Fannie Mae projects the average rate will decline to 6.6% by the end of Q3 and to 6.5% by year-end.

Despite slowing economic growth, consumer uncertainty, and an unbalanced housing market, mortgage rates are carrying little downward momentum as we look toward the end of 2025. This is largely due to the consistent and cautious policy set forth by Jerome Powell and the Federal Reserve. Since June 2022, the Federal Reserve has pursued tighter monetary policy and aimed for a “soft landing”—lowering inflation without causing a recession.

U.S. mortgage rates are indirectly affected by Federal Reserve policies. As the Fed reduces the federal funds rate, we typically expect mortgage rates to follow, though with some lag. The further we move from June 2022, when quantitative tightening began, the slower we can expect rates to decline.

Looking further back, many young Americans and first-time homebuyers may be unaware that the historical average for a 30-year fixed mortgage is 7.71%. Prior to 2023, the last time mortgage rates were this high was in 2000. The key difference now compared to the 1990s is affordability.

Supply and demand dictate home prices, as with most goods. When interest rates fell to their all-time low of 2.65% in January 2021, demand exploded as buyers flooded the market to purchase and refinance their homes. These artificially low rates contributed to housing prices appreciating by 19.15% year-over-year in Q1 2022. Now, appreciation has softened to 5.31% year-over-year, indicating that we have moved away from a blown-out sellers’ market and into a more balanced housing market.

The Federal Reserve will continue to monitor inflation and unemployment before easing further. Economists and markets expect two more federal funds rate cuts before the end of 2025. Though these cuts do not directly dictate mortgage rates, we can expect a continued slow and modest decrease. As housing supply improves, dramatic rate drops are unlikely; borrowers should expect rates to remain above 6% for the foreseeable future. 

Luis Gonzalez (NMLS 2090153) is a licensed loan officer with RWM Home Loans in Bellingham, WA. 

Key sources:

Primary Mortgage Market Survey - Freddie Mac

June 2025 Press Release - Fannie Mae

Mortgage Rate History - The Mortgage Reports

Monetary Policy - Federal Reserve

FHFA Housing Price Index

FRED St. Louis - Median Sales Price of Houses Sold for the United States

Cover photo by Cooper Hansley / Film With Coop; used with permission.