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Can I Afford to Buy a Home in Seattle, in 2017 or 2018?

“Can I afford to buy a home in Seattle right now?” With house values rising steadily across the Seattle metropolitan area, this is a very common question among home buyers.

Here’s an updated look at housing costs, mortgage rates, and other factors that will determine whether or not you can afford to buy a house in Seattle, in 2017 or 2018.

Can You Afford to Buy a Home in Seattle?

In July 2017, the real estate information company Zillow reported that the median home value for the Seattle metro area had risen to around $450,000. That’s across the metropolitan area as a whole. Within Seattle proper, the median home price has climbed to nearly $700,000.

Those figures represent double-digit gains compared to the same month last year. So that’s a primary consideration for those who want to know if they can afford to buy a home in Seattle.

Of course, there are properties available below the median price point. In this context, the “median” refers to the midpoint for the real estate market. So in the Seattle metro area, half of all homes are valued above $450,000, while the other half are valued below that point. And within the city itself, the midpoint or median is around $700,000 (as of August 2017).

Relatively Affordable Markets in the Area

Anyone thinking about buying a home in Seattle in 2017 or 2018 should consider some of the surrounding areas as well. Earlier, we talked about the big gap between the median home value for the city of Seattle, and for the broader metro area. There are relative bargains to be found once you move away from the city itself.

For example, the median home price in Everett, Washington was around $335,000 in August 2017. That’s roughly half of the median house value within the city of Seattle. So home buyers clearly have a lot more buying power in these more affordable markets.

Minimizing Your Down-Payment Expense

For a lot of would-be home buyers in the Seattle area, the down payment represents a major financial hurdle. But it might just be a perceived hurdle.

In fact, there are some widespread misconceptions regarding down payment requirements for home buyers. Surveys conducted by Realtor.com and other groups have shown that many people think they have to make a down payment of 20% or more when buying a home. But that’s inaccurate.

In truth, down payments can be as low as 3% for conventional home loans, and 3.5% for FHA-insured mortgage loans. Additionally, the VA program for military members and veterans offers 100% financing. (Learn more about your down payment options.)

A down payment gift from a family member or other approved donor could also help you afford to buy a home in Seattle. This is where a third-party contributor gives you money to help cover your down payment and/or closing costs. These days, a lot of different mortgage programs allow gifts. We’ve covered this topic before, and you can read more about it here.

On the Mortgage Rate Front, Some Good News

Mortgage rates are another important consideration for many home buyers in the Seattle area, since most of them use mortgage financing to complete their purchases. And on this front, we have some good news to deliver.

Unlike the steadily rising home prices in Seattle, mortgage rates have been relatively stable over the last few months. In fact, average rates have dropped over the last few weeks, according to one leading survey.

On August 24, 2017, Freddie Mac reported that the average rate for a 30-year fixed home loan dropped (again) to land at 3.86%. At the beginning of 2017, the average rate for a 30-year loan was 4.20%. So borrowing costs have clearly declined since the start of the year.

Looking forward, the Mortgage Bankers Association predicts that rates will rise gradually through the end of this year and into 2018.

But it’s those house values that home buyers really need to pay attention to. This is primarily what will determine whether or not you can afford to buy a home in Seattle. And those who postpone their buying plans until later this year or in 2018 will likely encounter higher housing costs.

Get a mortgage payment estimate. Having an estimate of your monthly housing payments will help you determine if you can afford to buy a home in Seattle. And we can help. Sammamish Mortgage is a family-owned mortgage company based in Bellevue, Washington. We can give you a mortgage rate quote along with an estimate of your monthly housing payments. Please contact our staff to get started!

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