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How Much House Can I Afford in Seattle? Updated for 2018

How much house can I afford to buy in Seattle in 2018, when using a mortgage loan?

With only two months left in the year, this is a common question among home buyers planning to enter the market soon. Here’s an updated look at housing market conditions and other factors that will help you answer this important question: How much house can you afford in Seattle?

Seattle Home Price Trends as of Fall 2017

It’s an understatement to say that home prices in Seattle have been on the rise. In fact, the median home values for both the city itself and the broader metro area have risen by double digits over the last 12 months alone.

Aaron Terrazas, a senior economist for Zillow, recently told KOMO news: “Seattle has the fastest appreciating housing market in the country right now [as of October 2017].”

This means that home prices in the area are rising faster than any other major city across the country. And this will have a direct influence on how much house you can afford in Seattle, if you buy in 2018.

According to the latest figures, the median home value for the broader Seattle Metro area reached $455,800 in October 2017. That was an increase of more than 20% over the same month a year ago, according to Zillow. Within the city itself, the median price point recently climbed above $700,000.

Related: King County buyer’s guide 2018

You Could Afford More House in a Surrounding Suburb

Home buyers who are willing to expand their searches to include surrounding areas could afford to buy more home. And this becomes obvious when you look at the median home values presented above.

The median price for Seattle proper is above $700,000. But when you look at the metropolitan area as a whole, the median drops to around $446,000 (as of October 2017). That’s because homes are comparatively more affordable in those surrounding areas. Keep this in mind when trying to determine how much house you can afford in Seattle. Broadening your search could get you more house.

Budget First, House Hunting Second

If you’re going to use a mortgage loan to buy a house in Seattle, it’s a good idea to put a basic budget on paper first. This will help you narrow your housing search to the kinds of properties you can actually afford, based on your monthly housing budget.

It doesn’t have to be anything complex. You just want to know how much money you have left over each mont,h after covering all of your recurring debts and expenses. That’s the starting point for determining your housing budget.

Getting pre-approved for a mortgage loan can also help you determine how much house you can afford to buy in Seattle. And this is an area where we can assist you. We can review your current financial situation — including income and debts — to determine how much of a loan you might be able to take on.

Understanding Debt-to-Income Ratios

Banks and mortgage companies use something known as the debt-to-income ratio (DTI) to determine how much a person can borrow for a home loan. This is another factor that can affect how much of a house you’re able to buy in Seattle during 2018.

As the name suggests, a debt-to-income ratio is simply a comparison between the amount of money you spend each month on your recurring debts, and the amount you earn in the form of income. DTI limits can vary from one mortgage loan program to the next. Generally speaking, however, most home loans have a limit somewhere around 45% to 50% for the total debt-to-income ratio. But it varies.

Let’s talk. This article gives you some basic insight into how much house you can afford to buy in Seattle, when using a mortgage loan to finance your purchase. But it uses generalizations that might not apply to your specific situation. Please contact us if you would like to know much you can borrow.

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