Seattle has the fastest-growing home prices in the country. A recent Zillow report found that Seattle median home values jumped a full 12 percent year over year. But are salaries keeping up?
A recent report by mortgage research firm HSH—as reported by the Seattle Times’s Mike Rosenberg—found that in order to afford a median-value home in the Seattle metropolitan area with a 20 percent down payment, an aspiring homeowner would have to make $93,400 per year. (Here, “affordability” assumes paying 28 percent of your income on home payments.)
Within the Seattle city limits, one would need an annual salary of closer to $140,000.
With 20 percent down costing around $17,000 more than last year, it’s not surprising that most folks aren’t buying with that kind of cash in hand. In the Times, Rosenberg points out that 20 percent down isn’t even typical for the area. Most pay closer to 10 percent. That makes monthly costs jump that much more, raising the income threshold to something closer to $110,000.
That’s just for this year, which doesn’t help people saving to buy a home in the future. A recent report by Zillow found that to keep up with rising home prices next year, the typical buyer in the Seattle metro has to add $394 per month, or $4,728 per year, on top of what they’re already saving—and that’s just for the down payment alone.