The Thurston County housing market is quietly diverging from national trends. While home prices are rising slightly across the country, local median list prices have actually dropped 4.3% and inventory is up 20.2% compared to last year. Mortgage rates have eased from 7.1% to around 6.35%, saving buyers roughly $200/month versus a year ago. The result is a market in healthy correction mode: more homes, less competition, and real negotiating power for buyers, especially in the $500K+ range, while well-priced, well-presented homes under $500K are still moving fast with multiple offers.
Happy Spring! As we look at the housing market in March 2026, you might be hearing a lot of confusing news. I want to help break this down so you know exactly what is happening and what it means for your own home journey. While the national housing market is seeing home prices go up 0.5% to 1.5% compared to this time last year depending on what source you’re reading, the reality right here in Thurston County is actually quite different. Our local median list prices have seen a 4.3% decrease compared to last March, and our available inventory has jumped by 20.2%. This local divergence from the national trend is creating unique opportunities for both buyers and sellers in our area. Let’s start by looking at the big picture national economy, and then drill down into exactly what this means for your specific neighborhood.
For those of you looking to buy a home, this slower pace is actually bringing some welcome relief to your monthly budget. The national average monthly mortgage payment has fallen by roughly $200 per month compared to last year. On top of that, we are seeing national housing inventory actively growing. Active listings are up 8% compared to last year. While we still have 17% fewer homes for sale than we did before the pandemic, this annual increase gives you more options to choose from. It also means that sellers are having to adjust their expectations. Buyers who stay in the market right now face much less competition than they did just a month ago, opening the door to ask sellers for things like closing cost assistance or rate buydowns.
One extra cost to keep an eye on when budgeting for your monthly payment is home insurance. National insurance premiums have increased by 6% over the last year. The good news is that this is the slowest annual growth rate we have seen since 2020, but it is still a helpful reminder to shop around for the best coverage rate when you are buying your home.
Mortgage rates are always a big topic of conversation because they directly impact your buying power. A year ago, rates were sitting up near 7.1%, and today they have come down closer to the 6.35% range, the highest rate we’ve seen since September 2025. We did see a brief dip below 6% recently, which caused a sharp reaction in the market before rates ticked back up slightly into the mid 6% range.
We can see exactly how buyers and current homeowners are reacting to these monthly and annual rate changes. Refinance applications dropped more than 40% compared to last month as rates ticked up, but they are still 33% higher than they were at this exact time last year. On the buying side, purchase applications have held remarkably steady. They are currently 1% higher than they were at this same time last year. This means that real, fundamental demand for buying homes remains solid despite the minor ups and downs in interest rates.
The broader economy is also playing a role in where things might head next. In February, the US economy lost 92,000 jobs compared to the previous month. We are also watching global events like the conflict in Iran, which temporarily pushed oil prices from $65 up to $119 a barrel before they settled back down to $105 a barrel at the end of the month. This global uncertainty directly impacts your borrowing costs, however, this uncertainty is also exactly why we are seeing less frenzy in the housing market, giving homebuyers the time and space to negotiate.
Let us bring things a bit closer to home and look at Washington state as a whole. The Northwest Multiple Listing Service tracks the housing data for most of our state, and their March 2026 numbers show a very clear picture of what is happening right now. We are seeing the number of homes available for sale continue to grow. There were 15,049 active listings on the NWMLS at the end of March, which is a 29.3% increase compared to this same time last year and a 12.8% increase from February.
While more homes are coming on the market, the number of closed sales stayed relatively flat compared to last year, going up by just 0.2%. However, activity is picking up as we enter the spring season, with closed sales jumping nearly 31% compared to February. As for prices, the median sales price for a home in Washington is currently $640,000. This is down 1.5% from last year, but up 3.2% from last month. This tells us that while home values are steadying over the long term, the spring market brings a slight bump in monthly prices.
On March 27, Governor Bob Ferguson signed Senate Bill 6026 into law, which takes effect on June 11. This legislation aims to boost housing supply by allowing developers to convert underused commercial properties, like vacant strip malls, directly into housing without the outdated requirement of including ground-floor retail spaces. I will be publishing a separate deep dive soon on exactly how these zoning changes could impact our local neighborhoods, so be sure to subscribe to my newsletter below!
According to the Washington Center for Real Estate Research, sellers are finally deciding it is time to move forward. Many homeowners who previously held off on selling to keep their low mortgage rates are now choosing to list their properties. If you are a buyer, this is great news because it means you finally have more inventory to choose from.
If you are looking to buy but are concerned about upfront costs, you will be thrilled to know that 74.8% of all listings in the NWMLS database currently qualify for some form of Down Payment Assistance (DPA). That equated to over 17,200 eligible listings in March alone, largely because this broad measurement covers everything from traditional single-family homes to multifamily properties and manufactured homes in parks.
These programs provide grants, forgivable loans, or deferred second mortgages to help bridge the financial gap. As a real estate broker, my job is to help you find the perfect home, but I partner with excellent approved lenders who can guide you through the financial details. Generally speaking, both new and repeat buyers can access these funds if they meet county-specific income limits, purchase the property exclusively as a primary residence, maintain a baseline credit score of around 620, and complete a free homebuyer education class. If you are interested in exploring these options, let me know, and I would be happy to connect you with a trusted lending professional to see exactly what you match with!
Let us take a close look at our own backyard here in Thurston County. The numbers from the end of March 2026 give us a very clear picture of our local housing landscape.
When we look at these numbers together, they completely support something I have been sharing with clients for quite a while. We are currently experiencing a market correction, not a market crash. Prices are softening slightly, which is a natural, healthy response to having more available homes on the market.
To really understand our current market, it helps to look at the past. Over the last ten years, our historical average has sat at just 1.4 months of inventory. As we discussed earlier, our supply has felt unbalanced for so long primarily due to factors outside of the provided data sheets, such as strict red tape around new construction and Olympia being nestled right between two rapidly expanding metropolitan areas. As those big cities grew, buyers naturally pushed outward into Thurston County. Because builders could not create new homes fast enough to meet that wave of demand, our available homes stayed squeezed near that tight 1.4 month average.
This is exactly why ending March 2026 with 2.32 months of inventory is such a big deal. Buyers finally have some much needed relief.
However, the market feels very different depending on your price point. For homes priced under $500,000, we ended March with just 1.54 months of inventory, which is a 14.9% increase from earlier in the month. These more affordable homes remain a very hot commodity for people wanting to get into homeownership, especially since some buyers are choosing to reduce their shopping budgets due to global economic uncertainty.
On the other hand, for homes priced over $500,000, we are seeing 2.89 months of inventory, marking a 9.1% increase from the start of the month. The recent bumps in interest rates we discussed earlier are holding buyers in this higher price bracket back a bit more.
So what is the takeaway for you? It completely depends on whether you are buying or selling, and what price point you are operating in.
For Buyers: Your strategy right now depends heavily on your budget. If you are looking at homes priced under $500,000, you are shopping for a very hot commodity where we only have 1.54 months of inventory. You need to be prepared to act fast; in fact, from my own experience out in the field this past month, even homes up to $600,000 that are priced smartly and present well are still seeing multiple offers and selling in less than a week. However, if you are shopping for homes over $500,000, you are looking at a much calmer market with 2.89 months of inventory. In this higher bracket, you have a wonderful moment of opportunity with the time and space to look at different options and make careful, confident choices.
For Sellers: You need to understand that while our overall inventory of 2.32 months means we are experiencing a healthy correction rather than a crash, you still face growing competition. There is a common myth that spring and early summer are always the best times to list a home without doing much work, but the data actually shows you face less competition in the middle of winter. Now that we are in spring and inventory is naturally tracking upward, prioritizing perfect pricing and presentation is incredibly important. Buyers have more options now, so your home needs to stand out. When it does present well and is priced accurately for this new, balanced market, you can still expect it to go under contract within a week or two.
Ultimately, the Thurston County market is stabilizing. The wild price jumps and bidding frenzies are largely behind us, and we are moving into a much more balanced environment. Whether you are buying your first home or selling to upgrade, success right now comes down to having the right expectations and being fully prepared for the current realities of the market.
If you are thinking about making a move or just want to chat about what these numbers mean for your specific neighborhood, please reach out. I am always here to help you navigate this process with confidence and clarity.
