Market News
By RSIR Staff | December 2, 2025
It’s been nearly a decade of historically low borrowing costs, so it’s understandable that today’s 6–7% mortgage rates can feel jarring. Elevated rates are reshaping buying power, yet they’re not stopping well-qualified buyers from making a move, especially in the Pacific Northwest’s sought-after waterfront and luxury markets. Instead, these rates are shifting buyer strategies, seller expectations, and how agents guide clients through the process.
While we are seeing rates higher than the ultra-low pandemic era, the numbers are not prohibitive. Transactions still close every day across Puget Sound, just with a new playbook. Here’s what to know about the current market, especially regarding rare waterfront properties.
Where Mortgage Rates Stand Today
Heading into late 2025, 30-year mortgage rates have largely stabilized in the mid-6% to low-7% range. After two years of volatility, the pace of fluctuations has slowed, and economists expect gradual moderation rather than dramatic swings.
That stability is meaningful and brings predictability, an essential part of the equation that has been missing. Even if rates aren’t low, knowing what to expect helps buyers plan more confidently. And in waterfront and luxury segments, where inventory stays tight and homes are highly differentiated, motivated buyers continue to move decisively when the right lifestyle opportunity presents itself.
How Higher Rates Are Shaping Buyer Behavior
1. Affordability Has Become the First Filter
Monthly payment, not price alone, is now the primary driver of buyer decisions. Facing higher borrowing costs, many buyers are rethinking their budgets or widening their search areas. In the waterfront market, this often means exploring secondary shoreline communities, places like Hansville, Camano Island, or the Key Peninsula, where value stretches further.
2. Buyers Are More Selective
High rates heighten the desire for “forever home” attributes: quality construction, timeless design, and lifestyle amenities. Thoughtfully updated, turn-key properties see stronger engagement, while projects requiring major renovation remain on the market longer.
3. Cash and Hybrid Buyers Have a Competitive Edge
Luxury and waterfront buyers often use a mix of cash and financing to manage tax strategy or liquidity. With higher rates, hybrid approaches, such as using cash to close, then refinancing later, are increasingly common.
4. Long-Term Thinking Is Back
Instead of short-term moves, buyers are focusing on multiyear plans, anticipating future appreciation and eventual refinancing options. Patience is, once again, part of the strategy.
Tips for Buyers in a High-Rate Market
Here’s how you can best position yourself for success if you’re hoping to buy in the current market.
Focus on total monthly cost vs. the headline rate.
Your lender can model scenarios at different purchase prices, down payments, or rate buydowns so you can compare the true cost of ownership.Explore rate-buydown tools.
Sellers (and sometimes builders) are often willing to contribute to temporary buydowns that can ease the first 1–3 years of payments. In a high-rate environment, this is one of the most effective negotiation tools available.Consider homes that need light updates.
While fully turn-key homes still move quickly, properties with cosmetic opportunities can offer value in otherwise competitive waterfront markets.Think beyond summer.
Waterfront listings surge in spring and summer but fall and winter often provide better opportunities with fewer competing buyers.Lock in the lifestyle, not the rate.
Rates can be refinanced; location is permanent. If the shoreline, dock, orientation, or privacy are perfect, that may outweigh short-term rate discomfort.
Tips for Sellers Positioning Their Home for Today’s Buyers
For those selling in the current market, here’s what to keep top of mind.
Price strategically from the start.
Buyers are payment-conscious, and overpriced listings stall quickly. Homes that align closely with recent comparable sales generate more qualified showings. Your RSIR agent can provide valuable insight when pricing your home.Highlight long-term value.
Waterfront property inventory is inherently finite and often sees strong appreciation across market cycles. An RSIR agent well-versed in the Pacific Northwest’s waterfront market can position your home as a durable lifestyle investment, not just a short-term purchase.Offer incentives that speak to today’s buyers.
Rate buydowns, closing credits, or prepaid inspections can boost buyer confidence without reducing your asking price.Elevate presentation.
High rates increase selectivity, especially in luxury. Professional staging, high-quality media, drone footage, and curated storytelling make a measurable difference.Make turn-key feel truly turn-key.
Address minor repairs and deferred maintenance before listing. Buyers facing higher payments want to minimize post-closing expenses.
The Bottom Line
High mortgage rates haven’t cooled the Pacific Northwest’s desire for waterfront living. Instead, they’ve simply changed how buyers approach the process. Instead of impulsive bidding, today’s market rewards preparedness, strategic negotiation, and realistic expectations.
For sellers, success comes from smart pricing, elevated presentation, and a willingness to offer incentives that meet buyers where they are. Opportunities are still abundant, but the strategy has evolved.
Ready to Navigate This Market?
Whether you’re evaluating a waterfront purchase or preparing to list your property, I can help! Contact me for personalized guidance and to explore our waterfront listings for ideas and inspiration.