5 Things Washington First-Time Buyers Should Know in 2023

Are you looking to buy your first home in Washington in 2023? If so, you’d be well-advised to get familiar with the home buying process. This article will provide you with valuable information regarding what all first-time home buyers should know when buying in Washington State in 2023.

If you’re a first-time homebuyer, then buying a home is completely new to you. As such, you need all the information you can get to make a sound home buying decision. 

There’s a lot of advice online for first-time home buyers in Washington State. But you’re in a hurry. So we’ve selected five of the most important things you should know about buying your first house in Washington in 2023.

5 Things Washington First-Time Home Buyers Should Know in 2023

Home prices in Washington have risen steadily in recent years, though they’ve actually dipped over the past 12 months. The average home price decreased 4.4% year-over-year from July 2022 to July 2023, according to Zillow. However, prices have increased nearly 51% over the past 5 years in WA state.

Prices are still on their way up, demand is high, limited inventory is tight, and competition is heavy.

Here are a few of the things you should know, as a first-time home buyer in Washington State. So let’s explore these topics.

1. It may be more difficult to get a mortgage loan these days

The mortgage industry has tightened up a bit over the recent past following uncertainty with the economy. As a result, it may be slightly easier to qualify for a mortgage loan today than it was in the past.

Meanwhile, mortgage credit availability is down. According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), mortgage credit availability dipped by 0.3% to 96.3 in July. A decrease in the index is indicative of tightening in lending standards.

A low debt-to-income ratio is also important. More specifically, your DTI should be no higher than 43%. Some lenders may even prefer a DTI that’s as low as 35%, though a ratio closer to 45% may be fine depending on the mortgage and the lender.

That said, there are mortgage programs available that allow for down payments as low as 3% (or 0% if you’re military). Working with the right lender can help homebuyers secure a mortgage with lower down payments, though other factors may have to be very strong for approval, such as a healthy income and high credit score.

The point is, you shouldn’t make assumptions about your ability to qualify for a home loan. Contact us today, and we’ll review your financial situation to determine if you’re a good candidate for a mortgage loan.

2. Home prices are still rising in Washington

Washington State home prices are still on the rise, despite the recent dip. According to the real estate information service Zillow, the median home value in Washington decreased by 4.4% between July 2022 and July 2023. Right now, median prices in the state are at $578,460. Over the last 5 years, however, prices increased just shy of 51%.

As a result of these trends, first-time home buyers in Washington will encounter higher housing costs than those who purchased over the last few years. So be sure to research the market ahead of time, and go into it with a realistic view of what you can afford.

3. Housing inventory is still tight in many cities

The primary reason why home prices have risen so fast in Washington over the past few years has to do with inventory – or the lack of it. In most cities across the state, the current supply of homes is falling short of demand.

This is especially true in the Seattle metro area, where supply is severely limited, though the supply situation is easing up somewhat. Seattle has just around a 1.86-month supply of housing available for buyers at this current time. And the surrounding King County area has a bit less at 1.50-month’s supply.

What does this mean to you, as a first-time home buyer in Washington? It means you should be prepared for some competition, and be ready to move quickly when the right house comes along.

4. Sellers’ market conditions persist across the state

We talked about the lack of inventory above, and how this affects you as a first-time home buyer in Washington. In 2023, most of the major cities across the state are experiencing sellers’ market conditions. In short, there aren’t enough homes for sale to meet the current level of demand.

This is an important factor to remember when it comes time to make an offer and negotiate with sellers. The reality is that current real estate market conditions favor sellers over buyers — at least in most parts of the state. 

Competition is strong right now, and bidding wars are not uncommon. That’s why it’s important to put your best foot forward and make sure your finances are in check before you start housing hunting.

So it’s probably not the time to argue with the seller over “nickels and dimes,” especially in certain markets, like Tacoma, where the housing market is very hot right now and prices are rising quickly. If you find a home that checks most of your boxes and falls within your budget, you’ll want to move on it quickly with a strong offer.

5. Mortgage rates are expected to keep going up in the last part of 2023

Last year, the interest rate for a 30-year fixed-rate mortgage was under 3%, making mortgages more affordable for buyers. However, mortgage rates have more than doubled since then, and more hikes are coming.

Now, with rates over 7% and home prices still rising, there’s a compelling argument for buying a home sooner rather than later.

Have Mortgage Questions?

Are you a first-time homebuyer looking to purchase a home in Washington State in 2023? If so, Sammamish Mortgage can help you get the mortgage you need. We are a local, family-owned company based in Bellevue and have been helping first-time home buyers in Washington since 1992. We offer a variety of mortgage programs in Washington, Oregon, Idaho, California and Colorado Please contact us if you would like to receive a rate quote on a loan, or if you have any mortgage-related questions.