July brought some encouraging signs on the inflation front. Consumer prices rose just 0.1% for the month, with annual inflation slowing to 3.4%. Core inflation, which excludes food and energy, dropped to 2.5% year over year, the lowest rate in more than five years. This development could influence the Fed’s next steps, especially with the recent jobs report showing job losses for the first time in months.
Housing market activity saw a decline in existing home sales for the second consecutive month. However, prices continue to show seasonal strength. Cotality’s latest data indicates a 0.3% increase in prices for the month and a 1.2% rise year over year, reinforcing the long-term upward trend in home values despite a slower sales environment.
Locally, the market reflects similar patterns. The Northwest MLS reports King County’s median sales price at $879,500 in July, a half-percent increase from a year ago. Inventory levels have risen nearly 20% year over year, giving buyers more options and negotiating power than they’ve had in a while.
In the broader economy, retail sales fell 0.6% in July, below expectations. Unemployment claims remained low at 209,000, indicating a stable labor market.
Optimal Blue’s index shows the average 30-year fixed mortgage rate at 6.647% as of August 14, slightly higher than the previous week. This rate is close to where it stood this time last year. Rates dipped below 6% before the conflict in Iran, but have since risen.
It’s important to note that the Optimal Blue index reflects about 35% of mortgage transactions nationwide. It is not a rate quote, and your personal rate will depend on factors like your credit score and loan-to-value ratio. This data is meant to provide a general sense of rate trends.
I can provide you with current mortgage rates based on your specific financial situation for home purchases or refinances in Washington state.
This week’s economic calendar is relatively light. The key event is the release of the FOMC minutes on Wednesday. Oil prices and the situation in Iran are also factors to watch, as they could influence rate movements.
Mortgage-backed securities are slightly down as of this recording, with the Dow declining by about 215 points. Overall, the market remains relatively flat.
A common myth about reverse mortgages is the belief that the bank takes ownership of your home. This is not accurate. Reverse mortgages have strict loan-to-value requirements based on the homeowner’s age and the home’s value.
A HECM loan is a non-recourse mortgage, meaning neither you nor your heirs will ever owe more than the home is worth, even if its value decreases. Once you no longer live in the home, you or your heirs can refinance or sell the property and keep the proceeds.
For seniors with significant home equity, a reverse mortgage can be a viable option to supplement income or address financial needs. If it’s not the right fit, there are other mortgage options available to help seniors.
If you have questions about your specific situation—whether buying, refinancing, or exploring a reverse mortgage—I am happy to discuss it further.
