Housing Market Outlook (February 2025)

Mortgage rates continue to be volatile, with weekly national averages ranging from 6.9%-7.26% (for 30 year fixed, source).

For the last two years, we’ve been in the highest rate environment of the last two decades. This has been reality long enough that we’re seeing sellers and buyers alike adjusting to adapt, rather than just hoping for rates to drop (which was a common narrative in 2022 and into 2023).

Will this sustained rate environment alleviate real estate prices, specifically here in Bellingham?

While rates can and do temper the appreciation rate in our community (let’s not forget that Bellingham home prices rose an astronomical 23% from 2020’s median to 2021’s median prices during that period of incredibly low rates), we still saw pricing growth - single family home prices appreciated around 5% this last year (for those that sold - a strong percentage of listings failed to sell entirely).

Economic policy is also volatile.

Our trusted local professionals who comment on economic policy have observed that the current administration has presented various priorities that are in conflict with each in terms of their projected impact on housing and the real estate market. So much depends on which policies are prioritized or put into effect in what order, and sometimes real-world impacts don’t play out even as the most knowledgeable economists might expect.

Fluctuations may happen, but pre-Covid home prices are a thing of the past.

Bellingham median prices in 2024 were up 61% versus 5 years prior in 2019. That’s an average of 12% appreciation each year for half a decade. We may see some price fluctuation in favor of home buyers, but I hesitate to make any predictions.

My take:

home purchase and sale decisions are made in the context of inflation, prices, interest rates and economic policies, but ultimately are motivated by personal reasons and financial planning.

There’s no perfect time or economic environment for making a change. Professionals like ourselves and our colleagues in lending are constantly working to find properties, programs, and opportunities to support each of client’s unique situation, capacity, and needs. Whether our first meeting is two years before you make a move, or you’re ready to go right away, we always recommend consulting with your trusted advisors to develop the strategy and pathway that will work best for you.

_________

Credits:

Housing market data extrapolated from local data provided by the Northwest MLS. My summary and in-depth analysis of 2024's local housing market is available in the 2024 Report.

Header photo courtesy Radley Muller Photography. Used with permission.

This article was written entirely by Tiffany Holden, with no AI research, drafting, or editing.