Washington Market Journal: February 23, 2022

We are living through the tightest housing market I have ever seen. Buyers are writing offers way over list price, waiving inspections, and throwing everything they have at sellers just to get noticed. It is a stressful environment where paper-qualified buyers are losing out to cash, forcing many to rethink how they structure their financing entirely.

This stress is driving two massive trends in our local mortgage market. Homeowners who bought even a couple of years ago are using cash-out refinancing to access their surging equity, while active buyers are turning to adjustable rate mortgages to keep their monthly payments within reach as home prices stretch household budgets to the limit.

The Camas Equity Engine

The frenzy is especially clear in Camas, Washington, where high-income professionals and families are targeting top-tier schools and large modern homes. Many buyers here commute across the river to Portland or work in the local tech sector, making Clark County a highly desirable landing spot. Property taxes in the area can be substantial, and when paired with a highly competitive bidding environment, the total monthly housing cost is escalating quickly.

This demand has pushed equity levels to historic highs for current homeowners. Sellers in neighborhoods like Prune Hill or Lacamas Lake hold nearly all the leverage, frequently seeing double-digit offers within hours of listing. For those who want to buy their next home without selling their current one first, accessing this equity has become a critical strategic move.

Using Existing Equity to Fund the Next Move

With values up so high, many homeowners are using cash-out refinancing to secure the liquidity needed for their next purchase. In a market where contingent offers are dead on arrival, having actual cash in hand from a refinance allows you to write clean, non-contingent offers that sellers actually take seriously. You can estimate the potential cash out and payment changes by typing your current balance, estimated home value, and desired cash-out amount into the tool to see how the numbers shift.

This strategy allows you to act like a cash buyer, but it requires a very careful look at your overall debt structure. You are swapping a low-balance loan for a much larger one, which means your primary mortgage payment will jump significantly. If you plan to sell your original home shortly after buying the new one, this is a short-term bridge, but you must ensure you can handle both payments if the sale takes longer than expected.

The Return of the Adjustable Rate Mortgage

As home prices climb faster than local wages, buyers are looking for any relief they can find on their monthly payments. This search has brought adjustable rate loans back into the conversation for the first time in years. These programs offer a lower initial interest rate for a fixed period, typically five, seven, or ten years, before the rate begins to adjust based on market indexes.

For a buyer in a highly competitive market, that lower initial rate can be the difference between a payment they can live with and a payment that forces them to walk away. It is a calculated risk, but in a peak-leverage market, it is one of the few remaining ways to shave money off the monthly cost. Buyers must understand the caps, adjustment intervals, and lifetime maximum rates before signing.

Evaluating Your Refinance and Loan Options

Before you jump into a restructure or write an offer on an adjustable rate loan, you need a clear checklist to evaluate your financial safety margin. Winning a house is pointless if the payment breaks your household budget next year.

Here is what you need to verify before choosing these aggressive paths:

• Confirm the length of the initial fixed period on your adjustable rate loan matches your realistic timeline for keeping the home.
• Verify the maximum possible payment adjustment so you know the worst-case scenario if rates rise.
• Review the closing costs of a cash-out refinance to make sure you recoup the fees before you sell.
• Check your post-closing cash reserves to ensure you are not completely wiping out your savings for the down payment.
• Analyze the property tax implications of your new purchase price, as Clark County reassessments will catch up to the sales price.

Questions I get about this

**Is an adjustable rate mortgage safe in a market like this?** These loans are far safer structurally than the ones from the mid-2000s, with strict qualification rules and built-in caps on how much the rate can rise. However, they are only safe if you have a realistic plan to refinance, sell, or absorb a higher payment before the initial fixed period ends.

**Can I use a cash-out refinance on my primary home to buy an investment property?** Yes, many clients are doing exactly this to build their real estate portfolios. Pulling equity out of your primary home to buy a rental property in Clark County can be an excellent wealth-building tool, provided the rental income easily covers the new, higher mortgage payment on the investment property.

Dom's take, written February 23, 2022

A client called me yesterday crying after losing their eighth consecutive bidding war in Camas, even though they offered fifty thousand dollars over list price and waived their appraisal contingency. It made me incredibly uneasy because on paper, this family is perfectly qualified, yet they are being treated like they do not stand a chance. I find myself spending more time talking to people about what a payment actually feels like on a Tuesday night than what a bank's automated underwriting system will technically approve.

Winning the house has stopped being the only thing worth celebrating when the price of admission is a monthly payment that keeps you awake at night. We are pushing the limits of affordability, and while my job is to find the loan program that works, I am urging my clients to set their own hard limits. Do not let the competitive frenzy of this moment dictate the next thirty years of your financial life.

What I'd say now (August 2026)

I was absolutely right to be uneasy about that peak market frenzy. Just weeks after writing those notes, mortgage rates climbed at one of the fastest paces in modern history, which completely broke refinance demand and triggered a massive rate shock. Buyers lost huge amounts of purchasing power in weeks, and those who took on high-risk adjustable loans hoping for a quick drop were caught in a historically frozen middle market where existing owners could not afford to sell and move.

Looking back, I would tell that exact client to hold steady rather than panic-buying with structured debt they were not comfortable holding long term. Now that we have entered a more balanced, negotiable market in 2026, buyers finally have the leverage to inspect, negotiate, and use structural tools like seller-paid buydowns to manage their payment safely. The market has finally thawed, proving that waiting for real buyer leverage was the right play. I keep tabs on these shifting dynamics regularly through my market updates to help borrowers make sense of their local options.

Talk it through with me

If you want to look at your options, we can map out a strategy that fits your long-term goals. You can reach out directly to discuss your scenario to get a pre-approval in roughly five minutes, and my team regularly closes loans in 15 days or less.