It’s approaching $200,000, among the many highest within the nation.
Seattle, WA, is understood for its pure magnificence, outside recreation, scrumptious delicacies, and tech-focused corporations. And along with being an enticing and distinctive place to dwell, Seattle can be house to a extremely aggressive actual property market that’s seen massive modifications over the previous few years.
For a lot of, shopping for a house in Seattle is a dream come true, but it surely’s additionally vital to know the way it will influence your funds. From down funds to month-to-month mortgage funds, there’s loads to grasp earlier than shopping for your first house
So whether or not you already dwell within the Emerald Metropolis or want to relocate to the realm, right here’s a breakdown of the earnings you’ll have to buy your first house in Seattle.
Take a look at our unique report for an in depth nationwide evaluation.
How a lot earnings do it is advisable to purchase a starter house in Seattle?
The median sale worth of a starter house in Seattle is $535,000. So as to afford this, first-time homebuyers in Seattle ought to make $173,378 per 12 months, up 8.4% from 2023. The median earnings in Seattle is $126,647, that means the standard resident can’t afford a starter house.
Solely California metros require the next annual earnings to afford a starter house. Anaheim, Los Angeles, Oakland, San Diego, San Francisco, and San Jose all high $175,000.
As anticipated, starter houses in Seattle are extra reasonably priced than the typical house (all worth brackets mixed; see methodology for particulars). So as to afford any median-priced house within the space, you’ll have to make $214,904 (as of October 2023).
Nationwide, you want an earnings of $75,849 to afford a typical starter house, which prices a median of $240,000. The typical U.S. family earns an estimated $84,072.
First-time homebuyers’ information to the Seattle housing market
Seattle has skilled a rising however combined market over the previous few years. Home costs have risen by 12.5% since January 2021, however the space additionally noticed sharp will increase and drops.
Like most different metros within the U.S., Seattle’s housing market exploded in early 2022, with costs rising 17.4% in simply three months from January ($734,950) to March ($888,844). They’ve settled again down a bit however are nonetheless elevated above pre-pandemic costs.
The pandemic-driven housing migration growth additionally affected Seattle much like many different coastal metros; extra individuals regarded to depart than keep, with consumers looking for solar and affordability. Whereas this decreased the variety of homebuyers within the space, Seattle nonetheless grew by 17,750 individuals from 2021-2022, a continuation of years of progress. Practically 9,000 individuals left the town from 2020-2021, however this turned out to be a blip.
If you happen to’re trying to transfer to Seattle, the realm is house to loads of facilities and sights all through its distinctive neighborhoods. The Area Needle, Pike Place Market, and the Washington Park Arboretum are among the most well-known spots, providing beautiful views and enjoyable experiences for individuals of all ages.
Standard neighborhoods in Seattle embody Ballard, Columbia Metropolis, Inexperienced Lake, and West Seattle.
What does a typical down fee appear to be for a starter house in Seattle?
Listed here are some widespread down fee quantities for a typical $535,000 starter house in Seattle:
Down fee proportion | Down fee quantity |
3% down fee | $16,050 |
3.5% down fee | $18,725 |
5% down fee | $26,750 |
10% down fee | $53,500 |
15% down fee | $80,250 |
20% down fee | $107,000 |
Down funds can vary from 0% to 100% of the whole home worth, relying in your price range, mortgage kind, and long-term priorities. Whereas consultants have traditionally advisable budgeting for a 20% down fee, the growing price of houses and continued sluggish wage will increase has led to a 15% down fee turning into extra widespread.
Some mortgage varieties permit for decrease down fee quantities. For instance, a Federal Housing Administration (FHA) mortgage requires simply 3.5% down, whereas the bottom attainable down fee for a typical mortgage is 3%. These quantities usually rely in your credit score scores, so consumers with increased credit score scores might qualify for decrease down funds.
What’s the typical mortgage fee for a starter house in Seattle?
The everyday month-to-month mortgage fee for a starter house in Seattle is $4,334. This assumes you place 3.5% down and have round a 7% rate of interest.
If this fee sounds too excessive, you would think about renting an condominium in Seattle. The median hire worth is $1,990, beneath half the standard mortgage fee. You too can use an affordability calculator to see what you may afford primarily based in your earnings and down fee.
What do you have to do subsequent?
If you happen to’re available in the market on your first house in Seattle, it’s vital to grasp how a lot home you may afford. Take your annual earnings, credit score rating, the present mortgage charges, and native market developments to decide that works finest for you.
From there, a Seattle agent may also help you navigate the complete house shopping for course of and supply worthwhile native experience. To be taught extra about the right way to purchase a house, take a look at Redfin’s First-Time Homebuyer’s Information.
Methodology
Redfin divides all U.S. properties into 5 buckets primarily based on Redfin Estimates of houses’ market values. There are three equal-sized tiers, in addition to tiers for the underside 5% and high 5% of the market. Redfin defines “starter houses” as houses whose sale worth fell into the Fifth-Thirty fifth percentile of the Redfin Estimate tier.
We calculated the annual earnings wanted to afford a starter house by assuming a purchaser spends not more than 30% of their earnings on housing funds. Housing funds are calculated assuming the client made a 3.5% down fee and in addition take a month’s median sale worth and common mortgage-interest fee under consideration.
The nationwide earnings information is adjusted for inflation utilizing the Shopper Value Index. 2024 earnings is estimated primarily based on projections from the U.S. Census Bureau’s (ACS) 2022 median family earnings utilizing the 12-month shifting common nominal wage progress fee. The speed was compiled from the Present Inhabitants Survey and reported by the Federal Reserve Financial institution of Atlanta.
We assume housing funds embody the mortgage principal, curiosity, property taxes, owners insurance coverage, and mortgage insurance coverage (when relevant).
All information sourced February 2024 except in any other case said.