The Housing Market Is Stronger Than You Think — Especially Here

📍 Edmonds, Shoreline, Mukilteo & South Snohomish County, WA|Buyer’s Guide|🏠 July 2026

You’ve probably heard plenty of unsettling things about the housing market lately. High rates. Stretched budgets. Headlines that make buying or selling sound like a questionable idea. But the data tells a very different story — and it’s worth understanding what’s actually happening before making any decisions based on what the news cycle is saying.

First, Some Important Context

This isn’t 2020 or 2021 — and it was never going to be. Those were what economists have called the “unicorn years”: historic low mortgage rates, bidding wars on everything, homes selling in days with multiple offers waived of contingencies. That kind of market was a once-in-a-generation anomaly. It was never a sustainable baseline.

When people compare today’s market to those years, of course it looks rough. But that’s the wrong comparison. Compared to virtually any other housing market in modern history, this one is holding up remarkably well. The fundamentals that support a healthy market — strong homeowner equity, low foreclosure rates, and steady if slower price appreciation — are all present right now.

That’s particularly true in Edmonds and South Snohomish County, where structural advantages like limited supply, strong demand, and the irreplaceable appeal of the Puget Sound waterfront continue to support values in ways that national headlines don’t capture.

Homeowners Are Sitting on a Mountain of Equity

One of the biggest reasons this market hasn’t cracked is the financial strength of today’s homeowners. The situation is fundamentally different from 2008 — and that difference matters enormously.

In 2008, homeowner equity and mortgage debt were nearly identical across the country according to Federal Reserve data. That meant homeowners who hit a rough patch had almost nothing to fall back on — which is a large part of what made that crash so devastating. When equity disappears and values drop below what’s owed, the only option for many homeowners becomes foreclosure.

Today the picture looks considerably stronger than 2008. According to ATTOM’s Q1 2026 Home Equity and Underwater Report, 43.3% of mortgaged homes nationally are equity-rich — meaning the combined loan balances secured by those properties are no more than half their estimated market value. At the same time, only 3.2% of mortgaged properties are seriously underwater — meaning owners owe at least 25% more than their home is worth.

That ratio tells an important story. The vast majority of homeowners are sitting on meaningful equity — not on the edge of distress. If they needed to sell, most could. That safety valve is one of the most important structural differences between today’s market and 2008, when equity had evaporated for millions of homeowners and foreclosure was the only option.

In the Edmonds market specifically, where the median home value has appreciated significantly over the past decade, many long-term homeowners are sitting on equity positions that would have been difficult to imagine fifteen years ago. That equity is real wealth — and it changes the dynamic of every decision they make about whether to sell, stay, or move up.

Low Rates Locked In — and What That Means for Inventory

Here’s a dynamic that doesn’t get enough attention in housing market coverage. According to Federal Housing Finance Agency data, more than half of all active mortgages in the country still carry a rate below 4%. That’s a significant portion of homeowners who have very little financial incentive to sell and trade their rate for one that’s nearly double.

This is one of the primary reasons inventory remains tight in markets like Edmonds, Shoreline, and Mukilteo. Many homeowners who might otherwise consider selling are simply staying put — comfortably positioned with low payments on homes they own significant equity in. That’s not a sign of market weakness. It’s a sign of financial strength at the household level.

For buyers, it means the supply constraints that have characterized this market for years aren’t going away quickly. For sellers who do choose to list, it means they’re entering a market with less competition from other sellers than historical norms might suggest.

Foreclosures Remain Well Below Historical Norms

One of the clearest indicators of a distressed market is a spike in foreclosures — and that’s simply not what the data shows. Despite some recent uptick in foreclosure activity nationally, volumes remain dramatically below historical norms according to ATTOM’s most recent foreclosure market report.

The reason is straightforward: homeowners with significant equity and locked-in low rates have options that distressed homeowners in 2008 simply didn’t have. If finances become difficult, selling is a viable path — because there’s equity to sell. That safety valve is one of the most important structural differences between this market and the conditions that produced the last housing crisis.

Prices Are Stabilizing — and That’s Actually Good News

National home price appreciation has slowed to approximately 2% year-over-year — a meaningful deceleration from the double-digit gains of the pandemic years. As Daryl Fairweather, Chief Economist at Redfin, explained recently:

“We’re in the middle of a long-term housing market correction, not a housing market crash. After the pandemic-era frenzy sent prices soaring and inventory to historic lows, the market needed a reset.”

That reset is healthy. Prices that appreciate at a sustainable pace are more durable than prices driven by panic buying and historically anomalous conditions. In Edmonds specifically, the local market has continued to show resilience — the median sale price reached $940,000 in late 2025, up 4.4% year-over-year, outpacing the national average even as the broader market has moderated.

The communities Terry works in — Edmonds, Shoreline, Mukilteo, and Woodway — have structural advantages that support values through market cycles: limited supply, consistent demand, and lifestyle attributes that don’t depreciate. Those fundamentals don’t change with interest rate headlines.

What This Means for Buyers and Sellers Right Now

For buyers, the most important takeaway is this: waiting for a crash that the data doesn’t support has a real cost. Every month spent on the sidelines is a month someone else is building equity, locking in a price, and getting ahead of what most economists expect to be a more competitive market once rates eventually moderate. The buyers who act when others are hesitating are historically the ones who look back on their timing with satisfaction.

For sellers, the picture is similarly clear. This isn’t the market to test an aggressive price — but it’s absolutely a market where a well-prepared, realistically priced home can achieve a strong result. The equity most Edmonds area homeowners have built over the past decade means selling from a position of strength is very much within reach.

Frequently Asked Questions