One rate market.
Seven different housing markets.

First, separate the Fed from your mortgage

The Fed began its 2022 tightening cycle on March 16, raising its short-term policy target to 0.25%-0.50%. By July 2023, that range was 5.25%-5.50%. These were policy rates, not the interest rates offered on 30-year home loans. March 2022 FOMC statement; July 2023 statement.

Mortgage pricing also reflects longer-term bond yields, inflation expectations, mortgage-market spreads and lender pricing. It can move before a Fed meeting, and it need not move by the same amount or in the same direction. That is why “the Fed cut” and “my lender’s rate fell” are different claims. For a deeper explanation of bond yields and mortgage spreads, see Federal Reserve Bank of Richmond research.

Freddie Mac’s national 30-year fixed average was 3.22% on January 6, 2022. It reached 7.08% in late 2022 and 7.79% on October 26, 2023. The latest reading is 6.95% on September 17, 2026, compared with 6.26% a year earlier. These are observed weekly averages, not rates every buyer could obtain. Freddie Mac data via FRED; latest PMMS release.

The annual averages tell a different part of the story: 5.34% in 2022, 6.81% in 2023, 6.72% in 2024 and 6.60% in 2025, calculated from weekly observations. There was some easing, but no return to pandemic-era financing. In 2026 the weekly average reached 5.98% on February 26 before rising again. A favorable rate window is not necessarily a durable trend. Historical weekly series.

What actually happened after rates rose?

2022: the turning point was inside the year

The seven city indexes in this analysis peaked in June 2022. From that peak to December, Seattle declined 7.5%, Bellevue 12.5%, Kirkland 12.6%, Redmond 13.7%, Issaquah 11.2%, Sammamish 14.9% and Mercer Island 11.0%.

Yet every city still finished above its December 2021 value. Earlier appreciation was large enough to outweigh the later decline in a calendar-year comparison. For a seller who bought near the peak, “prices rose that year” would have been a poor guide to the actual resale decision.

2023: stabilization was uneven

Bellevue, Issaquah and Sammamish finished 2023 within 1% of their December 2022 values. That is a useful example of approximately flat annual movement, not proof that interest rates had no effect. Kirkland and Redmond rose modestly, while Seattle and Mercer Island slipped.

2024: values recovered without a return to cheap money

All seven cities appreciated in 2024, from 3.7% in Seattle to 10.8% in Sammamish. The national weekly mortgage average across that year was still about 6.72%. This directly challenges the idea that prices can recover only after rates return to 3%.

2025 and 2026: renewed softness, not one uniform market

All seven ended 2025 below their December 2024 values. The latest comparable 12-month reading, August 2025 to August 2026, is also negative in every city, but the magnitude differs considerably. We should not describe a 0.8% decline and a 5.3% decline as the same experience.

Source: original calculations from Zillow’s all-home city ZHVI series and Freddie Mac weekly mortgage data via FRED. These are descriptive comparisons. They do not isolate how much of a city’s change was caused by rates.

A lower price can still come with a higher payment

Consider a $1 million purchase with 20% down: an $800,000 loan, fixed for 30 years. At 3.22%, monthly principal and interest would be approximately $3,468. At 7.08%, the same loan would require approximately $5,365, about 55% more.

Even if the purchase price fell 10% to $900,000 and the down payment remained 20%, the $720,000 loan at 7.08% would cost approximately $4,829 a month. That is still about 39% above the first example. Price relief and payment relief are different things.

The right question is not just what the home costs. It is what the entire move costs, and whether it works without a future rate rescue.

At today’s 6.95% benchmark, an $800,000 loan illustrates about $5,296 in monthly principal and interest. A one-percentage-point reduction to 5.95% would lower that by approximately $525; a rise to 7.95% would add approximately $547.

Why prices do not move one-for-one with rates

Higher rates reduce what many financed buyers can afford. But they can also discourage existing owners from selling when moving would mean replacing a low-rate mortgage with a more expensive one. That second effect can limit the number of homes available.

FHFA’s research on mortgage lock-in documents how this supply constraint can support prices even as borrowing becomes more expensive. Its findings are national research, not a measured causal estimate for these seven cities.

Local employment, household income, stock-based wealth, construction, property mix and the number of genuinely competing homes also matter. This article does not estimate each factor’s contribution. It shows why a rate chart alone is an incomplete pricing strategy.

What should we expect next?

Start with the newest evidence, not an old promise of cuts. On September 16, 2026, the Fed raised its policy range to 3.75%-4.00%. Its September projections put the median year-end policy-rate expectation at 4.1% for both 2026 and 2027. That is a conditional policy outlook, not a 30-year mortgage forecast. September FOMC decision; economic projections.

Fannie Mae’s September 11 housing forecast projected a 6.8% average 30-year mortgage rate for the fourth quarter of 2026 and a 6.7% annual average for 2027. Its rate assumptions used August 31 information, before the latest Fed decision and 6.95% mortgage reading. Treat those figures as a dated planning reference, not a promised path.

For Seattle and the Eastside, three conditional outcomes are more defensible than unsupported city-by-city price targets:

These are mechanisms to plan around, not probability-weighted forecasts. No city price target or guaranteed appreciation is implied.

What “better” means depends on your next move

• Buying: Set a comfortable all-in payment, preserve reserves, and compare the real alternatives in your price range. Ask a lender to compare credits, points and any temporary buydown over your likely holding period. Do not assume refinancing will be available or economical.
• Selling: Anchor pricing to current competing homes and recent relevant transactions. Evaluate net proceeds and terms together. Strong presentation cannot erase an unsupported price, but a broad negative headline is not a reason to undervalue a distinctive property.
• Selling and buying: Model both transactions at once. Include selling costs, replacement-home costs, financing and timing risk. The net cost of the move matters more than winning one side in isolation.
• Staying put: An index is context, not an appraisal of your home. Revisit your plans when your needs change, rather than treating every rate announcement as a reason to transact.