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Want a home in Seattle area? You'll need an $11,000 raise

Mike Rosenberg, The Seattle Times on

Published in Home and Consumer News

SEATTLE -- The Seattle area has now led the nation in home-price increases for more than a year -- the longest streak in the region's history. Just to keep up with those rising prices, would-be buyers needed an $11,000 pay raise in the past year to afford the typical mortgage.

Households now need a record $93,400 annual income to afford monthly payments on the median house in the Seattle metro area, according to a quarterly report from HSH.com, a mortgage and consumer loan-information company.

That figure is up from about $82,000 a year ago -- a level that already exceeded the region's actual median household income of $78,600 last year.

But even that income number understates the true cost for a lot of buyers, since it assumes a 20 percent down payment, which most people don't do. If you put 10 percent down, which is closer to the regional average, the income needed to afford typical monthly home payments jumps to nearly $110,000.

And on top of all that -- the actual down payment required to get a mortgage is rising along with prices, too. The median house now requires buyers to save an extra $17,000 for a higher down payment compared to a year ago.

The income figure represents the average required to afford a mortgage over a broad area from Tacoma to Snohomish, so it'll get you a home you can afford in a place like Renton or Burien. If you're looking for a home in the city of Seattle, the income needed to afford monthly payments on the typical house would exceed $140,000. In Bellevue and other pricey parts of the Eastside, it tops $170,000.

 

The income needed to buy a home here is seventh-highest in the country among metro areas, behind San Jose, San Francisco, San Diego, Los Angeles, New York and Boston.

These calculations take into account all home-payment expenses, like interest and taxes, and assume you spend 28 percent of your household income on your home payments.

Of course, this all also depends on your ability to afford the down payment, which is often the highest barrier to homeownership, especially for first-time buyers.

The typical down payment across the region is $58,000, up from $41,000 a year before, according to Attom Data Solutions, which tracks home purchases nationwide.

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