Is Now a Good Time to Buy a Home in Seattle?
Seattle isn’t just a hip city, it’s a city full of opportunity and a great place to settle. If you think about to buy a house in Seattle, here are a few things you should know.
The housing inventory is very limited
As of May, Seattle had just 0.49 months of housing in the real estate market, according to data compiled by Housing Tides, an EnergyLogic company. This represents a decrease of 1.15% compared to the previous year.
To be clear, limited inventory isn’t just a problem in Seattle. On the contrary, there is a shortage of houses available to buy nationally. In May, the national inventory stood at just 1.13 months of supply. For context, it takes a 4-5 month supply to create an equalized housing market – a market that doesn’t necessarily favor buyers over sellers or vice versa.
Since the home inventory is so low in Seattle, you might have a hard time finding a property that fits your price range. Or you might have a hard time finding a home with the features you’re looking for.
Seattle home prices have gone up
In February 2016, the median home price in Seattle was $ 405,000. In May 2021, the median home price hit $ 738,000. This represents an increase of 26.2% from the previous year, which is a pretty substantial jump.
Of course, it’s not just Seattle where house prices have gone up. Property values are on the rise nationally due to low supply and high demand. But given that median price of $ 738,000, buying in Seattle right now can be a boost, financially speaking.
Mortgage rates are always competitive
Home values in Seattle can be rising and inventory can be extremely low. But mortgage rates remain at competitive levels.
At the time of this writing, the average interest rate in Washington state for a 30-year fixed loan is 3.16%. Meanwhile, the average 15-year mortgage rate is 2.47%. These rates are quite low, historically speaking, and they could allow you to buy a more expensive home.
In fact, if you fix a 30-year fixed mortgage at 3.16% on a $ 738,000 house for which you have paid 20%, your monthly principal and interest payment will be $ 2,539. However, this figure does not include the other homeownership fees, such as:
Should you buy a house in Seattle today?
To buy a home in Seattle, you’ll need a fairly large down payment based on the value of the property. You will also need to make sure that you can swing your mortgage payments.
Ask yourself the following questions to see if you are ready to buy:
- Does my credit rating in good condition?
- Do I have a low level of existing debt?
- Can I get 20% off a house in Seattle? And if not, can I afford the cost of private mortgage insurance in addition to my mortgage payments?
- Is my job stable?
- Have I done my research and determined that Seattle is where I want to settle?
If the answer to all of these questions is yes, then maybe now is a good time to buy a house, especially since mortgage rates are so competitive. That said, there is nothing wrong with waiting if you prefer to hunt a house at a time when there are more properties to choose from. Low mortgage rates are unlikely to go away for a while, so there is certainly no need to rush your decision.
A historic opportunity to potentially save thousands on your mortgage
There is a good chance that interest rates will not stay at multi-decade lows any longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger to buy a new home.
We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the advertisers included. The Ascent does not cover all the offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.