Home prices in the Seattle metro area in May showed their biggest monthly gain in more than 20 years, as a tight supply of homes and low interest rates drive values higher.
Until recently, interest rates were at record lows, and that’s been spurring people to jump back into the housing market after the 2008 crash. Home prices in the Seattle metro area climbed more than 3 percent in May compared with April. That’s according to the Standard and Poor’s Case Shiller Home Price Index.
The last time prices jumped that much month-to-month was in April 1990, when George H. W. Bush was president and Milli Vanilli was on the radio.
Real estate economist Matthew Gardner says a strong local economy is pushing prices higher now, and he says buyers are trying to purchase while they still can afford to.
"Recent increases in interest rates are taking the last few people that sat on the fence and making them think twice now as to whether they want to jump into the market or not. Many are saying, yes, they do," Gardner said.
Gardner says he expects price gains to slow down as more people list their homes and interest rates continue to rise.
He says for people trying to lock in low rates, now may be the best time. The Federal Reserve is expected to start winding down its stimulus program sometime in the near future, and that will drive rates up even more.
