An air carrier First Officer reported losing visual contact with the airport and with traffic they were following when they encountered unexpected IMC.

Narrative

Reported weather at IAD was 039 OVC; 008 SCT; 003 FEW; calm winds. We briefed visual to IAD 1R backed up by ILS. After being turned onto approximately an 8 mile final at 2000' we were advised that we were less than five miles in trail of a B777 and needed to slow immediately to approach speed. Upon reaching glide slope we had visual on the field and decided to reduce automation in order to fly a dot high for wake turbulence avoidance. We also offset slightly to the right. We encountered unexpected unreported IMC conditions. I attempted to put aircraft back on GS and LOC. We noticed we had gone full scale on the localizer to the right. We were preparing for a go around when we broke out visually. Seeing that we were on PAPI glidepath and could correct to final we continued in VMC on glidepath and touched down in the TDZ. We trusted the ATIS weather report at night; we put too high a concern toward wake turbulence vs. automation/flight guidance. We weren't 'go around' minded. Our hesitation about going around was unwarranted and needs to be done immediately. We should have asked for spacing from heavy rather than do it yourself avoidance at night in weather that can't be visually confirmed.