The income threshold for buying a home has declined for two consecutive years. Falling mortgage rates and rising household income have pushed the earnings needed to purchase a median-priced home to $111,252 — down from $115,870 in 2024 and $120,669 in 2023. Housing analysts generally consider a monthly payment at or below 30% of household income to be affordable.

The numbers tell a more complicated story, though. The median household income sits just above $86,000 a year, still short of what’s needed to comfortably afford a median-priced home. And while the gap between renting and buying costs is narrowing in most major metros, renting isn’t getting cheaper: the annual income required to afford the median rental rose from $74,464 in 2024 to $76,020 in 2025. A roughly 4% increase in median household income over the same period has helped offset that rise.

Mortgage rates are a key driver of the shift. Rates have dropped from nearly 7% a year ago to about 6.1%, reducing a typical monthly mortgage payment by roughly $125. The current market also has more sellers than active buyers, giving buyers more room to negotiate on price and concessions than they’ve had in recent years.

Recent conditions reflect just how much the market changed during the pandemic years. The national median sale price climbed from $317,100 in Q2 2020 to a peak of $437,700 in Q2 2022, a 38% increase in two years. Prices have since eased to $410,800 as of Q2 2025 but remain nearly 30% above pre-pandemic levels. Starter homes followed a similar path, rising from $95,000 in 2012 to $165,000 in 2019 and reaching $250,000 in 2024.

Housing economists project that affordability could return to more typical historic levels by 2030 if mortgage rates ease to around 5.5% and home price growth stabilizes. In the near term, the trend is moving toward greater accessibility, though the pace remains gradual.

This post was based on information found on Puget Sound Business Journal.

King County homebuyers are increasingly turning to adjustable-rate mortgages to reduce their monthly homeownership costs. With the county’s median home price approaching $1 million and mortgage rates stubbornly above 6%, the affordability pressures driving this trend continue to grow.

Unlike traditional fixed-rate mortgages, adjustable-rate mortgages start with a lower interest rate that remains fixed for an initial period of several years before adjusting with the market. That lower starting rate is the primary draw for buyers looking to reduce their monthly payments.

In 2025, 36% of King County home purchases involved an adjustable-rate mortgage. Across Washington, adjustable-rate mortgages made up nearly a quarter of home loans, the highest share the state has seen since 2007. With mortgage rates on the rise again due to inflationary and political pressures, and no Federal Reserve cuts expected, experts say that share is likely to keep climbing.

Adjustable-rate mortgages are typically 0.5% to 1% lower than conventional fixed-rate mortgages, totaling a minimum savings of roughly $244 per month on a $750,000 loan at today’s rate. In King County, where prices routinely exceed that figure, the savings can be even more significant.

Many buyers are betting that rates will fall before their fixed period ends, allowing them to refinance, or plan to sell before their rate adjusts at all. Industry experts describe it as a relatively low-risk approach for buyers who do not expect to stay in their home beyond the typical seven-year window.

Adjustable-rate mortgages carry a stigma from the 2008 financial crisis, when they played a central role in a wave of foreclosures. Lenders at the time offered extremely low introductory rates lasting only two or three years and approved practically anyone regardless of their ability to repay. By 2004, these loans made up half of all home loans in Washington. When borrowers could not afford the higher rates, the fallout reshaped the housing market for years.

Today’s adjustable-rate mortgages are a different product entirely. Lenders must now verify that borrowers can afford the loan at higher post-introductory rates, initial fixed periods are longer, and rate discounts are more modest, making the kind of payment shock that defined the 2008 crisis far less likely.

With ongoing affordability concerns statewide and across King County, adjustable-rate mortgages offer a way to reduce the initial cost of the loan. In large part, their increasing popularity stems from the growing gap between home prices and what many borrowers can afford.

This post was based on information found on Puget Sound Business Journal.

As spring gets underway, our region’s real estate market is sending mixed signals. March saw inventory climb across the board, yet buyer activity didn’t keep pace with that supply growth. Affordability remains a central theme: mortgage rate sensitivity continues to weigh on decision-making at higher price points, while markets that have seen meaningful price corrections are beginning to show signs of reengagement. The result is a regional landscape that looks quite different depending on where you’re standing.

KING COUNTY 

King County’s median residential sold price was essentially flat year over year at $975,000, but the stability in price masks some hesitation beneath the surface. Active listings jumped 42% from last March, yet closed and pending sales fell 3% and 4%, respectively — a notable disconnect that likely points to continued price and rate sensitivity. Buyers had more options but didn’t enter the market at a faster pace. The condo market reflects a similar mood: the median sold price slipped 7% to $550,000, while active listings grew 25% year over year.

SEATTLE

The Seattle market tells a different story. The median residential sold price fell 6% to $944,000 in March, and that correction seemed to move things along— closed and pending sales rose 7% and 1%, respectively, even as active listings climbed 29%. Increased affordability appeared to draw buyers in despite the expanded inventory. In the condo market, the median sold price dipped 4% to $602,750, with active listings up 17% year over year.

EASTSIDE 

The Eastside continued to navigate market recalibration. The median residential sold price dropped 9% to $1,550,000, while active listings surged 60%. Even so, pending sales fell 15%, suggesting buyers were being highly selective despite having considerably more inventory to choose from. The gap between supply growth and transaction activity could mean more softening ahead. For condos, the median sold price rose 3% to $728,000, though active listings climbed 40% year over year, a level of growth that may test price resilience going forward.

SNOHOMISH COUNTY

Snohomish County saw active listings surge 49% year over year, but demand continued to lag — pending sales fell 8%, and while closed sales edged up 2%, that gain may be difficult to sustain given the pipeline. The median residential sold price declined 3% to $769,950, a modest but telling dip as inventory growth weighs on pricing. In the condo market, the median sold price fell 5% to $501,000, with active listings up 62% year over year, a steep increase, and one that will likely keep downward pressure on prices in the near term.

March’s trends reinforce that we’re in a market that rewards patience and preparation on both sides of the transaction. For buyers, expanding inventory and moderating prices in several markets represent a genuine shift from the conditions of recent years, creating more room to be thoughtful and deliberate. For sellers, strategy has never mattered more as buyers grow more discerning. For expert guidance tailored to your goals this spring, it helps to have a trusted Windermere advisor on your side.

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