Income Needed to Buy Your First Home in Seattle

The amount is approaching $200,000, making it the highest amount in the country.

Seattle, Washington is known for its natural beauty, outdoor recreation, delicious cuisine, and technology-focused businesses. In addition to being an affordable and unique place to live, Seattle is also home to a competitive real estate market that has seen significant changes in recent years.

For many people, buy a house in seattle A dream has come true, but it’s also important to know how it will affect your finances.From down payments to monthly mortgage payments, there’s a lot to understand before buying your first home

Whether you already live in the Emerald City or are considering moving to the area, here’s a breakdown of the income you need to buy your first home in Seattle.

check out our original report Detailed nationwide analysis is possible.

How much income do I need to buy a starter home in Seattle?

The median sales price for starter homes in Seattle is $535,000. To afford this, first-time homebuyers in Seattle would need to earn $173,378 a year, an 8.4% increase from 2023.. The average income in Seattle is $126,647. typical resident Can not I can afford a starter home.

Only metro California requires a higher annual income to purchase a starter home. Anaheim, Los Angeles, Oakland, San Diego, San Francisco, and San Jose all cost over $175,000.

As expected, starter homes in Seattle are more affordable than the average home (all price ranges combined; see methodology for details). To be able to afford a median-priced home in the area, Must earn $214,904 (As of October 2023).

Nationally, you need an income of $75,849 to buy a typical starter home, which costs an average of $240,000. The average household income in the United States is estimated at $84,072.

Seattle Housing Market Guide for First-Time Home Buyers

Seattle has experienced a variety of markets over the past few years while continuing to grow. House prices have increased by 12.5% ​​since January 2021, but the metro has also seen sharp increases and decreases.

Like other large U.S. cities, Seattle’s housing market exploded in early 2022, with prices increasing 17.4% in just three months (from $734,950 in January to $888,844 in March). ). Things have calmed down a bit, but prices are still above pre-pandemic prices.

The pandemic-induced housing migration boom affected Seattle, as it did many other coastal cities. More people were leaving than staying.what buyers are looking for solar and affordable.But Seattle is still 17,750 people increase Years of growth will continue in 2021-2022. Nearly 9,000 people left the city between 2020 and 2021, but this turned out to be temporary.

If you’re considering moving to Seattle, the area’s unique neighborhoods offer a variety of amenities and attractions. The Space Needle, Pike Place Market, and Washington Park Arboretum are some of the most famous spots, offering spectacular views and fun experiences for people of all ages.

Several Popular areas in Seattle include ballad, columbia city, green lakeand west seattle.

What is the typical down payment for a starter home in Seattle?

Here are some common down payment amounts for a typical $535,000 starter home in Seattle.

Down payments can range from 0% to 100% of the total home price, depending on your budget, loan type, and long-term priorities. Experts have traditionally recommended budgeting for a 20% down payment, but as home prices continue to rise and wage growth remains sluggish, 15% down payment It’s becoming more common.

Depending on the type of loan, you may be able to set a lower down payment. for example, Federal Housing Administration (FHA) The loan requires a down payment of just 3.5%, but the down payment is minimal. conventional loan is 3%. These amounts typically depend on your credit score, so buyers with higher credit scores may be able to make a smaller down payment.

What are the typical mortgage payments for a starter home in Seattle?

The typical monthly mortgage payment for a starter home in Seattle is $4,334. This assumes a 3.5% down payment and an interest rate of approximately 7%.

If you think this payment is too high, consider the following: rent an apartment in seattle. The median rental price is $1,990, less than half the typical mortgage payment.You can also use affordable price calculator Find out how much you can afford based on your income and down payment.

What should I do next?

If you’re considering your first home in Seattle, it’s important to understand: how much house can you buy. Consider your annual income, credit score, current mortgage rates, and local market trends to make the decision that’s best for you.

From there, Seattle agency We can help you navigate the entire home buying process and provide valuable local expertise. To learn more about how to buy a home, visit Redfin. First time home buyer’s guide.

methodology

Redfin divides all U.S. real estate into five buckets based on Redfin’s estimates of home market value. He has three tiers of the same size and a tier for the bottom 5% and top 5% of the market. Redfin defines a “starter home” as one whose sales price falls between the 5th and 35th percentiles of homes. Redfin estimates layer.

We calculated the annual income needed to purchase a starter home, assuming the buyer does not spend more than 30% of their income on home payments. Home payments are calculated assuming the buyer has made her 3.5% down payment, and also take into account the median monthly sales price and average mortgage interest rate.

National income data are adjusted for inflation using the Consumer Price Index. 2024 earnings are estimated based on the U.S. Census Bureau’s (ACS) 2022 median household income projections using 12-month moving average nominal wage growth rates. This rate was compiled from the Current Population Survey and reported by the Federal Reserve Bank of Atlanta.

We assume that your home payment includes mortgage principal, interest, property taxes, homeowner’s insurance, and mortgage insurance (if applicable).

All data is sourced as of February 2024 unless otherwise noted.