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Low inventory is still supporting home prices in Washington, but the situation has partially improved compared with the extreme shortages of a few years earlier. Inventory has increased somewhat, yet the market still has far fewer homes for sale than what economists consider a balanced market.
According to the most recent housing market reports, all of the major cities in Washington had less than a 2-month supply of homes in March 2026. This number falls short of what is considered a “balanced” or normal real estate market.
According to most economists, a healthy real estate market has between a 5- and 6-month supply of homes for sale. In theory, that means it would take 5 to 6 months to sell all of the homes currently listed for sale if no new ones came onto the market in the interim. It’s just a standardized way to measure inventory within a housing market. And Washington State is still falling short.
King County had the lowest inventory levels in March, with a 2.8-month supply. Above all else, this is why Washington State keeps generating positive housing market and home price forecasts. House values across the state are expected to continue rising as a result of the supply-and-demand imbalance.
Related: Seattle Housing Forecast Through 2026: Prices Slated to Increase Modestly
With low inventory and strong demand within Washington’s housing markets, it’s no wonder we have seen steady home-price appreciation over the last year’s.
According to the latest figures from Zillow, the median home value for the state reached $573,071 last month. That was a gain of around 23.2% from the same time last year. Looking forward, their economists are projecting continued growth over the next year.
Home prices in Washington State are expected to remain relatively stable in 2026, with most forecasts predicting modest appreciation rather than large increases or declines.
Many housing economists anticipate price growth of roughly 0% to 3% over the year, depending on local market conditions and the direction of mortgage rates. The housing market has shifted into a slower, more balanced phase, where price growth is expected to be gradual.
Several current market conditions support this outlook. Washington’s median home price is still relatively high — around $585,669 as per Zillow. At the same time, housing inventory has begun to increase, with the number of homes for sale rising more than 13% year-over-year.
Even with that increase, the state still has about 2 months of housing supply, which is well below the four to six months typically considered a balanced housing market. When inventory remains this limited, it tends to prevent significant price declines because buyers still outnumber available homes.
That said, the pace of the housing market has slowed over the years. Homes are typically staying on the market longer, and buyers often have slightly more negotiating power than they did when bidding wars were common.
Mortgage rates remain a major factor influencing demand. If rates decline meaningfully during 2026, home prices could see somewhat stronger appreciation, potentially in the 3% to 5% range. On the other hand, if rates remain high or economic conditions weaken, price growth could remain flat or even dip slightly in some areas.
Overall, the most likely outcome for Washington State in 2026 is a stable housing market with modest price changes rather than dramatic swings. Limited inventory, strong regional demand, and the lock-in effect among existing homeowners continue to support home values, even as higher mortgage rates keep the market from overheating again.
Pro Tip: Check out our 2026 Conforming Loan Limits and FHA Loan Limits pages to help you understand how much you can borrow with a specific mortgage program.
People are flocking to Washington State. And as more people continue to make their way here, the demand will remain strong and inventory will continue to struggle to keep up. In fact, recent data suggests that the state is experiencing a positive “net domestic migration,” which means that more people are moving into the area compared to those who are moving out.
Demand fundamentals continue to support home values in Washington. The region benefits from strong employment centers, particularly in the technology sector around Seattle, Bellevue, and Redmond. These areas continue to attract high-income workers, which sustains demand for housing.
Over the past decade, Seattle’s population grew 21%. The city’s Metro Area population grew by 0.81% from the previous year. The Seattle Metro Area now has a population of approxmiately 4 million.
All of this means there are more residents who need to find housing. Some will become renters, while others will enter the housing market in search of a home. This supports the demand side of the supply-and-demand equation in the Seattle area and other Washington housing markets. And it comes at a time when inventory is at record lows.
Disclaimer: This article includes various trends, projections, and forecasts relating to the Washington housing market. This information was compiled from third-party sources not associated with our company. We have gathered it here as an educational service to our readers.
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve borrowers across Washington, California, Colorado, Idaho, and Oregon. We are pleased to offer a myriad of mortgage programs to our valued clients that we have been offering since 1992, including fixed-rate mortgages, adjustable-rate mortgages (ARMs), and jumbo loans. Visit our website to get an instant rate quote or to use our online mortgage calculator. Please contact us if you have any questions or are ready to get pre-approved for a mortgage.
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