October 2025 Issue

Inventory is climbing, giving buyers more options, while home prices are showing signs of moderation after years of rapid growth. The median sales price in September dipped 0.7% year-over-year, from $635,000 to $630,700, and fell 3% month-over-month from August’s $650,000.

Similar month-over-month declines were seen in King, Snohomish, and Pierce counties. Interest rates have declined slightly, but not enough to significantly impact the market.

“House prices in the NWMLS service area have generally been sluggish in response to high interest rates,” said Steven Bourassa, Director of the Washington Center for Real Estate Research at the University of Washington. “Initially, high interest rates discouraged both sellers and buyers, but in recent months, sellers have been listing properties at a faster rate than buyers have been purchasing them. To some extent, these changes may reflect typical seasonal fluctuations, but at some point the laws of supply and demand may prevail, and prices may lose some of their stickiness.”

“Seattle’s housing market is continuing to rebalance following large swings in prices and demand in the last few years,” said Selma Hepp, Chief Economist at Cotality. “Improved affordability is certainly helping attract home buyers – especially for mid-range and tech-enhanced homes, that are now facing less competition than in the years prior. Home prices are expected to move sideways and pick up again in early 2026 with the spring home buying market, though overall rate of appreciation will be slower as buyers’ incomes catch up and affordability remains the top concern.”

Source: NWMLS

New listings of U.S. homes for sale rose 2.3% year over year during the four weeks ending October 5, the biggest increase in over three months. Some sellers listed their homes in September as the weekly average mortgage rate dipped to 6.26%, a 10-month low, in hopes that lower rates would lure buyers.

But buyers aren’t budging. Pending sales fell 1.3% from a year ago, the biggest decline in five months, and the typical home that sells is taking 48 days to go under contract, a week longer than last year and the longest September span since 2019. Redfin agents in much of the country say house hunters are waiting for rates to drop more before making a move.

Mortgage rates, which have ticked up to 6.34% from last month’s low point, are still more than double pandemic-era lows, and rising home prices are exacerbating high costs. -Read more at Redfin News

Mortgage rates are based on bonds and bonds are trading at their best levels since September 17th.  Of course there are different kinds of bonds, so we should specify that we’re talking about the bonds that are specifically tied to mortgages.

With this in mind, it’s no surprise to see mortgage rates also at the lowest levels since September 17th.

Compared to yesterday, the bond market was actually fairly flat. So why did rates improve? It has to do with timing. Yesterday afternoon saw a decent rally in bonds (rallies = lower rates), but it was late enough in the day that many lenders didn’t bother adjusting their mortgage rate offerings until this morning.