When is the best time to buy a house in Washington State?

For those who live an active lifestyle and want easy access to rugged, beautiful terrain, Washington state is the place to be. Want to put down roots that rival those of the towering Douglas firs? Buying a house in the Evergreen State does not need to be daunting. Well-informed buyers can make this dream a reality.

According to the Zillow Home Value Index (ZHVI), the average cost of a home in Washington state is $610,121. This is an 11% increase from last year when the average house cost $558,180. Two years ago, the average cost was $454,425. With costs clearly on the rise, it may be wise to buy before prices hike again.

Best time of year to buy a house in Washington state

March and April are generally the best months to buy a house in Washington state. During this time, there are usually more houses on the market, offering buyers a better range of options. Many of these houses are also move-in ready, making your moving process that much simpler.

For those looking to buy a house at a discounted rate, winter is the best season. That is when house prices in Washington tend to level off. Plus, homeowners usually list their homes in the summer so those who opt to sell in the winter may be more amenable to negotiations. The ZHVI states that 42% of Washington state homes sold for less than the list price, good news for those who hope to negotiate. Aim to buy between Christmas and New Year’s if this is your plan. 

Several other factors to consider:

• Listing price: Washington homes listed in January tend to have the lowest price, 5.7% lower than average according to data from Realtor.com. Avoid November, as houses listed that month have the highest price, nearly $60,000 more than the annual average.
  
• Housing inventory: As the saying goes, “April showers bring May flowers,” but May also brings 12% more homes to choose from.
  
• Mortgage rates: December boasts the lowest mortgage rates. Mortgage rates also doubled in 2022, an expensive reality that has led many sellers to lower their sales price. 

What should I look for in the market to know if it’s good?

You’ve probably heard the housing market referred to as a buyer’s or seller’s market. Buying a home when it is a buyer’s market means you can usually find a home for a lower price with fewer buyers to compete with. There will be more homes for sale than there are buyers interested in homes. During a seller’s market, that is reversed: there are more buyers than homes for sale. This drives home prices up as competition between buyers ensues.

There are a few additional indicators that will help you determine what the housing market looks like and if it’s a good time to buy. If there is a decrease in unemployment rates across the nation, for instance, the housing market is likely to be doing well.

While gauging the status of the housing market nationally is beneficial, it’s also very important to look at the local economy in the area you’re looking to move to. Look for market trends in the area. If there are new real estate developments, new restaurants and retail spaces opening and the area is gaining popularity, the housing market there is good. Looking at mortgage interest rates is also essential when determining the status of the housing market. If there are low mortgage interest rates, then it may be a good time to buy a house. Even if you notice small rate decreases, those small changes can lower your monthly payments by $100 or more and are worth looking into.

Am I financially ready to buy a house?

Your personal finances will greatly influence your perception of the best time to buy a house in Washington State. A down payment on a home is traditionally between 10% and 20% of the cost of the home’s purchase price, and you’ll want to make sure you have enough to make that payment. If you aren’t able to do that, you also have the option of purchasing private mortgage insurance (PMI). This way, if you’ve saved 3% to 5% of the home’s value for a down payment, you can still be offered a home loan from a lender. Your monthly mortgage payment will just be increased due to the additional cost of the PMI. You also have the option to take advantage of no-down-payment programs, such as the programs we offer at Solarity Credit Union.

When thinking about what type of mortgage you qualify for, having a high credit score (740 or higher) and a low debt-to-income ratio are beneficial because then you can qualify for a prime residential mortgage with a low interest rate. If your credit score is 640 or below, you can qualify for a subprime mortgage with a higher interest rate.

Be sure to consider the additional costs of homeownership aside from the mortgage and down payment too. Zillow research finds that things like taxes, insurance and utility payments – the additional costs of homeownership – can cost an average of $9,080 per year. Factor those costs into your budget as well as any renovations you may have to do on the home, including regular maintenance.

3 ways to land a great deal on a house in Washington state

1. Decide your needs and wants for a house

The clearer you are, the better. In Washington, the average house was on the market for 17 days. If you see a house that meets your needs, don’t wait to make an offer because odds are it won’t be on the market long.

By differentiating between your wants and needs, you can avoid emotional buying and wasting time touring houses that are a bad fit, while making appropriate compromises and being prepared to take action when the right house becomes available.

2. Set a realistic budget

As you consider your budget, keep in mind that your total housing cost will include your PITI payment (principal, interest, property taxes, and insurance), plus potential HOA dues.

Try using the 28/36 rule to determine what you can afford to borrow. This debt-to-income ratio is what lenders use to ensure you will be able to afford mortgage payments. Your total housing cost should not exceed 28% of your gross income. Total debt payments should not exceed 36% of your income.

Don’t forget the hidden costs of homeownership. Insurance, utilities, home maintenance, repairs, and taxes can sneak up on homeowners. To avoid financial stress down the road, be sure to factor these often overlooked costs into your budget.

3. Secure financing with a trusted lender

Need a home loan to make your dream a reality? With Solarity, you may not need to have 20% down in order to qualify for a conventional home loan. Solarity offers first-time home buyers zero-down payment and low-down payment loan programs. Find out more here.

What’s next?

With all of this to consider, our Home Loan Guides at Solarity Credit Union are equipped to help you navigate the financial side of the homebuying process and achieve your homeownership goals. We offer home loan options for all stages of homeownership, with flexible loan terms and competitive rates. Whether you’re trying to buy a second home, you’re a first-time buyer or you’re looking to refinance the home you live in, Solarity has a variety of options for you.