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Seasons change quickly, and much like the change in temperature, so too do home prices and real estate markets change. This begs the question: Will home prices in Washington State heat up this season, or will the market remain stagnant throughout 2026?
The best way to answer these questions is to look at current supply and demand trends. If you’re thinking of buying a home in Washington State this year, you’ll want to assess trends and price forecasts in the local real estate market.
In major cities across Washington, there is a serious shortage of housing supply relative to demand. This means that home buyers are competing fiercely for limited inventory. Some parts of Washington State are seeing incredibly tight inventory.
Right now, Washington State has about a 2.83-month supply of housing inventory. That’s well below what’s considered to be a balanced market.
And with low inventory typically comes an increase in home prices. Prices have inched up over the recent past, and they’re expected to increase into 2026, which we’ll get into next.
High demand and low inventory are still the driving factors within Washington’s housing markets. And it will start pushing prices north. The median home sales price in Washington now sits at $585,669 as of February 2026.
Despite the fact that the average home price statewide has dipped YOY, experts agree that prices will inch up over the nest year, albeit modestly.
Related: Co-borrowing on the rise in WA
In some ways, the real estate market in Washington is something of a special case. In the state’s major population centers like Seattle, there is currently only a 2.6-month supply of homes for sale. That’s well below the national average, as well as the average is seen in other states.
And in the surrounding King County, there’s only a 2.8-month supply of available homes for sale to meet buyer demand.
This, combined with steady demand from buyers, will probably keep Washington house values rising through the year.
Related: Is now the time to buy a home?
With all of this housing demand in Washington, you would think the home building industry would be ramping. But that’s actually not the case.
New construction in Washington State is broadly lagging behind demand and what would be needed to meaningfully ease the housing shortage, even though there are occasional bright spots. Multiple independent signals point to slow or stalled activity in key parts of the housing pipeline: permits, starts, job growth and developer sentiment.
Recent statewide data show residential construction permits in Washington have sunk back to levels last seen around 2013, according to the state Economic and Revenue Forecast Council. Permits are a leading indicator for future building — when they drop, it often means less construction is coming.
Builders face higher construction costs in Washington than the national average (especially labor and materials), and financing remains tighter after recent interest rate increases. Those factors make it harder to justify new projects — especially for lower-cost housing.
Although some years may show short-term upticks or localized bursts of activity, the overall trend has been toward slower new residential construction across much of the state.
This lag contributes to persistent housing shortages, pressure on prices and rent growth, and challenges for affordability — especially in high-demand regions like the Puget Sound area.
In other words, we can probably expect demand to outstrip supply in most housing markets across the state, at least for the foreseeable future. And this will continue to put upward pressure on home prices in Washington throughout 2026.
Disclaimer: This article includes forecasts, data and trends provided by third parties not associated with our company. We have compiled this information as an educational service for our readers.
If you’re in need of a mortgage in Washington, Sammamish Mortgage is here to help. We are a mortgage company serving the Pacific Northwest region including Washington, Idaho, Colorado, Oregon, and California. We have been providing mortgage programs with flexible qualification criteria to borrowers since 1992, including our 15-year fixed-rate mortgages, 30-year fixed-rate mortgages, and adjustable-rate mortgages (ARMs), among others. 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.
Population growth, strong job markets in major cities, and ongoing demand for housing continue to influence activity across the state.
Prices vary by region, but many areas remain competitive due to limited inventory and steady buyer demand.
Many markets continue to face tight supply, which can contribute to faster sales and upward pressure on prices.
Many investors are drawn to the state’s strong rental demand, diverse economy, and long‑term growth potential.
Single‑family homes, townhomes, and well‑located condos continue to attract buyers, while multi‑family properties remain popular with investors.
Competition can be strong in high‑demand areas, but some regions offer more accessible pricing and a wider range of options.
Working with a knowledgeable local agent, getting pre‑approved, and understanding neighborhood trends can improve your chances in a competitive environment.
Whether you’re buying a home or ready to refinance, our professionals can help.
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