Low mortgage rates and stabilizing incomes are keeping Washington state’s home affordability high despite increasing home prices, according to the Runstad Center for Real Estate Studies at the University of Washington.
Glenn Crellin, the center’s associate director for research, said the statewide median home price was $237,600, which is 14.1 percent higher than this time in 2012. Despite the steep single-year price gain, this median was seasonally lower than the final two quarters of 2012. County-level medians ranged from a high of $412,500 in San Juan County to a low of $65,000 in rural Lincoln County.
Despite the increased median prices, continued declines in mortgage interest rates allowed improvement in the Housing Affordability Index. This measures the ability of median-income families to buy median-price homes, assuming a 20 percent down payment and 30-year mortgage at prevailing rates.
Crellin said the index shows that middle-income families, at an annual income of $73,150, could qualify for a home priced well above the statewide median. Only San Juan County had an all-buyer index below 100, meaning that a typical middle-income family there could not quite afford a median-priced home in the county. King County had the second-lowest affordability at 134.6, meaning the typical family could afford a home priced about 35 percent above the local median.
Meanwhile, the statewide first-time buyer index reached a record high of 104.4 during the first quarter, meaning a household earning 70 percent of the median household income could just afford a typical starter home.