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Summary: Where will Seattle’s conforming loan limit be in 2021? This article will look deeper into the trends that could dictate how things pan out next year.
Conventional loan limits for the Seattle metro area will go up in 2021, as they have been doing over the past few years with increasing housing prices. Home prices have been increasing in Seattle over the past 12 months, so where will conforming loan limits in Seattle be?
Currently, the conforming loan limit for Seattle (and all of King County) for 2020 is $741,750. But federal housing officials will increase it in 2021 to $776,250.
Will Seattle See Higher Loan Limits in 2021?
Home prices across the Seattle metro area have increased steadily over the past few years. Accordingly, the conforming loan limit has steadily increased over the recent past and will increase again in 2021.
According to the latest data for December 2020, the median home value for King County is now north of $688,500. And it’s even higher within Seattle at $783,900.
High house prices in and around Seattle have lead to an increase in the conforming loan limits for the area for 2021.
Loan limits are established by federal housing agencies and are largely based on the median home values within each county. And when those house prices rise considerably over the course of a year, housing officials often increase the loan limits to keep up. That’s something we’ve seen in Seattle over the last year.
Consider the following:
The median home value for King County, Washington was $688,500 in December 2020, according to Zillow, as already mentioned. The median price within the city of Seattle was $783,900. The 2021 conforming loan limit for the county and metro area will be $776,250, which is lower than both the King County and Seattle median home values. It’s an interesting situation, which means that people buying the average-priced home in Seattle or King County as a whole will have to take out a jumbo loan.
In King County — and within the Seattle metro area in particular — there is a slight “gap” between home values and loan limits. Those limits are set below average and median house prices for this part of the state.
Going ‘Jumbo’ With Your Mortgage Financing
As mentioned earlier, it’s possible to borrow more than the conforming loan limit for a particular county. This is referred to as a jumbo mortgage.
As of 2021, a conventional home loan in the Seattle area that exceeds the $776,750 limit is considered to be a jumbo loan. And with house values as high as they are right now, there are likely more borrowers seeking this level of financing today.
Need a home loan?
If you’re in the market to buy a home in Seattle, Sammamish Mortgage is available to help. We offer a wide variety of mortgage programs and tools with flexible qualification criteria. We’ve been helping buyers obtain the mortgages they need in Oregon, Washington, Colorado, and Idaho since 1992, and we’d love to help you too. Please contact us today to get started.