Seattle homebuyers need $219,000 income despite modest affordability gains

Homebuyers in the Seattle metro area must earn nearly $219,000 a year to afford a median-priced home, according to a new report released by Redfin.

The income threshold is down 5.5% from a year ago, making Seattle one of the three most improved major metros in the country, according to Redfin.

Redfin defines a home as “affordable” if a buyer taking out a mortgage would spend no more than 30% of their income on the monthly housing payment. By that standard, only about 14% of local listings are considered affordable in the Seattle metro area in April. Nationwide, that number climbs to 33%.

Redfin found the typical American household would actually need to spend 40% of their income to purchase a median-priced home, down only slightly from 42% a year ago.

Nationally, Americans need to earn nearly $117,000 to afford a typical home — about $29,000 more than the median U.S. household income of roughly $88,000.

Affordability improving in Seattle, though challenges remain

April marked the seventh consecutive month in which housing affordability improved on a year-over-year basis, driven by dropping mortgage rates that averaged 6.33%, down from 6.73% a year earlier. The estimated median household income also jumped 4% year over year.

“It’s encouraging that affordability is gradually improving,” Redfin Economist Grishma Bhattarai said. “House hunters who have been waiting on the sidelines may want to start paying close attention: In addition to costs coming down, there are still more homes on the market than there were a year ago, many more sellers than buyers, and more room for buyers to negotiate.”

Locally, the picture is mixed. Housing inventory surged 28.4% across Washington compared to a year ago in April. At the same time, the median single-family home price in King County fell 6.8% to $960,000 while Snohomish County’s median dipped slightly to roughly $800,000. The price for a single-family home in Pierce County jumped 5.8% in April to $597,850.

The modest improvements may already be fading. Mortgage rates climbed again in May, with the weekly average hitting 6.51%, meaning buyers locking in rates now may find no improvement over last year. Economists also warn that the ongoing Iran conflict could continue pushing up oil prices and further rattle consumer confidence.

Redfin expects affordability to improve slightly through the remainder of the year, though further economic shocks could derail that trajectory.

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