‘Panicking’ Seattle home buyers, spooked by rising interest rates, rush to buy
December 5, 2016
Mike Rosenberg, Seattle Times
(The following is an excerpt from the lengthy article. You can read the entire article here.)
As Seattle home prices continued to soar to unprecedented heights over the past couple of years, homebuyers still had one savior: very low mortgage interest rates. But even that bright spot is starting to disappear, adding tens of thousands of dollars to the cost of a home.
Rising mortgage rates that have swept the country since the election are whipping the local housing market into a frenzy during a normally slow time of year. Some buyers are finding out that they can no longer afford the same house they were approved for just months ago. And others who had been kicking the tires are frantically rushing to seal the deal on their new home, fearing interest rates will rise even higher.
New figures released Monday showed that the number of homes sold across King County soared nearly 30 percent in November compared to a year ago, with similar spikes in Snohomish, Pierce, and Kitsap counties. It was the Puget Sound region’s busiest November for home sales in 11 years.
Realtors say they typically see a surge in home sales when interest rates spike, but the recent rise happened so swiftly it caught many buyers off guard and created a sense of urgency.
“They’re definitely panicking,” said Kimberly Johnston, a managing broker for John L. Scott on the Eastside. “They’re trying to close as fast as they can. I think it is fear-based for a lot of buyers. They do understand their buying power will change if (rates) continue to pick up.”
She’s seen buyers sweetening deals to speed up the process by waiving inspections or putting down more money up front.
Leah Harrison and her husband were anxious to close on a house they were eyeing in Snoqualmie after hearing interest rates could go higher. They locked in their loan interest rate Friday, concerned rates would rise again over the weekend. To secure the deal, they added an extra $10,000 onto their offer for the house.
“It makes a huge difference for us. We don’t have a huge budget so we’re really concerned about getting that rate locked in,” Harrison said. “I was afraid that the longer we wait, and the more we negotiate, the higher the rate could go.”