It’s approaching $200,000, among the many highest within the nation.
Seattle, WA, is thought for its pure magnificence, out of doors recreation, scrumptious delicacies, and tech-focused firms. Along with being an inexpensive and distinctive place to stay, Seattle can also be dwelling to a extremely aggressive actual property market that’s seen giant adjustments over the previous few years.
For a lot of, shopping for a house in Seattle is a dream come true, however it’s additionally essential to know the way it will influence your funds. From down funds to month-to-month mortgage funds, there’s rather a lot to grasp earlier than shopping for your first dwelling
So whether or not you already stay within the Emerald Metropolis or need to relocate to the world, right here’s a breakdown of the earnings you’ll have to buy your first dwelling in Seattle.
Try our authentic report for an in depth nationwide evaluation.
How a lot earnings do that you must purchase a starter dwelling in Seattle?
The median sale worth of a starter dwelling in Seattle is $535,000. With a view to afford this, first-time homebuyers in Seattle ought to make $173,378 per yr, up 8.4% from 2023. The median earnings in Seattle is $126,647, that means the everyday resident can’t afford a starter dwelling.
Solely California metros require a better annual earnings to afford a starter dwelling. Anaheim, Los Angeles, Oakland, San Diego, San Francisco, and San Jose all prime $175,000.
As anticipated, starter houses in Seattle are extra inexpensive than the common dwelling (all worth brackets mixed; see methodology for particulars). With a view to afford any median-priced dwelling 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 dwelling, which prices a median of $240,000. The common 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 metro 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 $734,950 in January to $888,844 in March). They’ve settled again down slightly however are nonetheless elevated above pre-pandemic costs.
The pandemic-driven housing migration increase additionally affected Seattle just like many different coastal metros; extra folks regarded to go away than keep, with consumers looking for solar and affordability. Nevertheless, Seattle nonetheless grew by 17,750 folks from 2021-2022, a continuation of years of development. Practically 9,000 folks left the town from 2020-2021, however this turned out to be a blip.
When you’re seeking to transfer to Seattle, the world is dwelling to loads of facilities and sights all through its distinctive neighborhoods. The Area Needle, Pike Place Market, and Washington Park Arboretum are a few of the most well-known spots, providing beautiful views and enjoyable experiences for folks of all ages.
Some widespread neighborhoods in Seattle embrace Ballard, Columbia Metropolis, Inexperienced Lake, and West Seattle.
What does a typical down fee appear like for a starter dwelling in Seattle?
Listed below are some widespread down fee quantities for a typical $535,000 starter dwelling 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 overall home worth, relying in your price range, mortgage sort, and long-term priorities. Whereas consultants have traditionally beneficial budgeting for a 20% down fee, the rising value of houses and continued sluggish wage will increase has led to a 15% down fee changing into extra widespread.
Some mortgage varieties enable for decrease down fee quantities. For instance, a Federal Housing Administration (FHA) mortgage requires simply 3.5% down, whereas the bottom doable down fee for a standard mortgage is 3%. These quantities sometimes rely in your credit score scores, so consumers with increased credit score scores could qualify for decrease down funds.
What’s the typical mortgage fee for a starter dwelling in Seattle?
The standard month-to-month mortgage fee for a starter dwelling 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 can take into account renting an residence in Seattle. The median hire worth is $1,990, below half the everyday mortgage fee. You can even use an affordability calculator to see what you may afford primarily based in your earnings and down fee.
What must you do subsequent?
When you’re available in the market in your first dwelling in Seattle, it’s essential to grasp how a lot home you may afford. Take your annual earnings, credit score rating, the present mortgage charges, and native market traits to decide that works finest for you.
From there, a Seattle agent may help you navigate the complete dwelling shopping for course of and supply worthwhile native experience. To study 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 prime 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 dwelling by assuming a purchaser spends not more than 30% of their earnings on housing funds. Housing funds are calculated assuming the customer made a 3.5% down fee and likewise take a month’s median sale worth and common mortgage-interest price into consideration.
The nationwide earnings information is adjusted for inflation utilizing the Shopper Worth 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 development price. The speed was compiled from the Present Inhabitants Survey and reported by the Federal Reserve Financial institution of Atlanta.
We assume housing funds embrace 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 acknowledged.