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Mortgage rates fell below 6% for the first time in years last month, offering a glimmer of hope for the sluggish Seattle-area housing market. Then, the United States and Israel launched strikes on Iran — sending rates back up again.
The flip-flop came as hopeful sellers put a seasonally high number of homes on the market, just to find buyers are mostly still reluctant to make a move.
“(Sellers’) enthusiasm is not being matched by buyers',” said Daryl Fairweather, chief economist at Redfin. “It seems Seattle is still in the buyers’ market territory.”
Last month, single-family home listings rose 19% in each of King, Snohomish and Kitsap counties and 13.5% in Pierce County compared with a year ago, according to data released Wednesday by the Northwest Multiple Listing Service.
Fairweather attributes the rise in new listings last month to the drop in mortgage rates.
“Sellers have been wanting to move for a while, but they’ve been delaying for lower mortgage rates,” Fairweather said.
Many homeowners secured sub 4% mortgage rates during the pandemic before rates rose to their highest since the mid-2000s. Mortgage rates averaged nearly 6.8% in 2023 and 2024 before they began to inch down in 2025.
Last month, the 30-year mortgage rate fell to 5.98% — its lowest point in 3-1/2, according to Freddie Mac.
But the relief didn’t last long. Mortgage rates quickly returned above 6% this week after oil prices surged amid the raging war in the Middle East. Iran is one of the world’s largest producers and exporters of oil.
Mortgage rates are influenced by many factors, including bond market movements, inflation expectations and economic conditions.
The conflict’s effect on mortgage rates could be temporary. But a prolonged war in Iran could have a long-term effect on mortgage rates if oil market disruptions continue, Redfin economist Chen Zhao wrote in a news release. Still, it’s not yet clear in which direction mortgage rates will go in response.
Higher energy prices can lead to higher rates through inflation expectations, but geopolitical turmoil sometimes leads to lower rates as investors dial back risk to seek out safety in bond markets, according to Zhao.
Just not enough for buyers
Even with the relatively lower rates, buying activity in February remained lethargic as rocky economic conditions and high prices continued to deter buyers, she said.
Closed sales fell 4.5% in King County, 8% in Snohomish County and less than 1% in Kitsap County last month compared to a year ago. Pierce County, where closed sales rose 1.3%, was the only exception.
For the most part, single-family home prices rose across the region year over year. The median single-family home price grew 2.3% to $936,000 in King County, 5% to $578,250 in Pierce County and nearly 4% to $561,250 in Kitsap County, while they dropped 4.5% to nearly $745,000 in Snohomish County.
In King County's priciest areas, median home prices dropped — falling almost 1% to $850,000 in Seattle and a whopping 16% to $1,435,000 on the Eastside.
No matter whether they rose or fell in February, households across the Seattle area are still struggling to afford homes, Fairweather said.
All those counties’ median sales prices would be considered unaffordable for those earning their county’s median household income, even if they put 20% down at a 5.98% interest rate, according to the U.S. Census Bureau data.
“(Mortgage rates softening) made a difference, but it’s not enough to change the decision for most buyers,” Fairweather said.
Uneven market
Although data shows the market is still sluggish, some Seattle-area real estate agents report heightened interest from buyers propelled by dampening rates and a wider selection of homes.
“I think a lot of buyers were ready to rock 'n' roll this year,” said Seattle agent Emily Anderson with Every Door Real Estate.
In some areas, buyers competed fiercely for desirable single-family homes, she said. Two of her buyers had to compete with more than a dozen other bids on each of a pair of homes in Green Lake and Phinney Ridge.
“If it’s an A-plus property … that house is always going to have competition,” she said.
Dana Fitzpatrick, a Compass agent based in Bainbridge Island and the Greater Seattle area, said she saw an influx of buyers, partially driven by lower rates and more new listings.
“Our inventory was very low, and so if they had been watching the market for a long time, I think they’re coming in with more decisiveness coming into this year,” she said.
For her sellers, however, the level of demand from buyers is uneven.
“We have some listings that are moving very quickly and are moving much faster than the market averages, and we have some that are sitting,” she said. “To me, it feels like there’s a really steady demand for a product that’s well-priced.”
Redfin data shows buyers have been flexing their negotiating power amid slower sales since last year.
Around half of homes in the Seattle metro area sold below their original listing price in 2025, according to Redfin. However, sellers aren’t willing to budge much. Seattle had the smallest average discount of 5.7% out of the country’s metro areas last year.
“I think there’s more synergy between sellers' expectations and buyers' willingness to pay,” Fitzpatrick said.
Grim condo market
In much of the Seattle area, the condo market continued to lag in February.
Despite new condo listings rising 7% in King County, 40% in Snohomish County and 4% in Pierce County, closed sales fell 23%, 9.6% and 22.2% respectively, according to NWMLS data.
Median condo sales prices were down 11% to $545,000 in King County and 9% to $375,000 in Pierce County, while they inched up 1% to $530,000 in Snohomish County compared to a year ago.
The lagging condo market was evident in King County’s most condo-dense areas. In Seattle, prices fell 4.6% to $596,275, while closed sales dropped 9.6% year over year. The situation was even more grim on the Eastside, where prices fell nearly 23% to $607,500, while closed sales plummeted more than 39%.
In recent years, condo owners have seen appreciation slow and costs rise as their buildings aged. That’s kept buyers wary of condos and more likely to save for a single-family home while continuing to rent, Fairweather said.
“Renting a one-bedroom apartment is cheaper than paying for a one-bedroom condo on a monthly basis,” she said.
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