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Washington has long been a hot state in terms of housing, and prices have risen considerably over the years, despite relatively stagnant home price growth over the past year. But what will the outlook be for the housing market in Washington for 2026?
We’ve long known that New York and California are home to some of the most expensive housing markets in America. But new data suggests that Washington State is moving up the ranks as well, and at a fast pace.
In fact, a recent article in Business Insider revealed that Washington State is in the top 10 most expensive markets in the country.
According to data released by Zillow, home prices in Washington State dipped by 0.5% compared to the same time last year. Right now, the average home price in Washington State is $585,576.
We all know that Seattle’s housing market has been red-hot for years. But there are other markets nearby that are also hot healthy now, including Tacoma. While the city has seen a slight decrease in home values of 1.1% over the past year, experts predict home prices will increase modestly over 2026. Right now, the median price of homes in Tacoma is $478,988.
From Bellingham in the east to Spokane in the west, home prices in the state have remained relatively stagnant over the past year. Despite this, Washington still remains one of the most expensive states in the country for house values, and is now ranked within the top seven by some analysts.
Like the national housing market, Washington State’s real estate market is considered healthy right now and is expected to be for the next few months.
Related: Check out the 2026 Conforming Loan Limits and FHA Loan Limits in Washington to help you understand the maximum amount you can borrow with a given mortgage program.
So what’s going on here? What is it about the Washington State housing market that’s causing home prices to be so high? It’s a supply and demand story, as always.
Frank Nothaft, chief economist for real estate data provider CoreLogic, recently cited the state’s unique blend of urban and scenic outdoor activities as one of the big lures. Millennials, in particular, are drawn to what this area has to offer. And the state’s strong economy is equally attractive.
As a result of all this, housing demand has surged in recent years. But the state’s construction industry has been sluggish by comparison, and new-home construction hasn’t kept pace with demand.
Housing inventory is usually measured by the number of months worth of supply (homes for sale). Most economists consider a six-month supply to be a healthy and balanced housing market. But many cities across Washington State fall well below this level.
In King County, for instance, housing inventory is under 2.8-month supply right now. That’s quite a bit less than what a balanced market is supposed to look like in terms of inventory.
That said, inventory appears to be increasing, but because of such strong demand, the current supply cannot keep up.
So, the most populous areas of Washington State are all suffering from a shortage of home inventory. This comes at a time when housing demand is rising, due to population growth and economic improvements.
It’s Econ 101: Rising demand and limited supply puts upward pressure on prices.
Pro Tip: Use our online mortgage calculator to estimate your loan costs.
Home prices in Washington State have risen steadily increased over the past year — at least in most cities. And they are expected to continue increase throughout 2026.
As such, anyone looking to buy a home might want to jump in soon before prices continue to take off. Not only will that mean paying less, but it will also mean you will enjoy growth in home equity as the value of your home appreciates.
If buying a home and taking out a mortgage in Washington State is on the agenda, call Sammamish Mortgage. Since 1992, Sammamish Mortgage has been helping borrowers get approved for various mortgage programs in Washington, Idaho, Colorado, California, and Oregon, and we’d love to help you too. Get in touch with us today for an instant rate quote or to get pre-approved for a home loan.
Whether you’re buying a home or ready to refinance, our professionals can help.
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