Affordability Index Falls To Early 2005 Levels

With all of the first quarter behind us, and the question of whether or not we’re in another real estate bubble here in Seattle on everyone’s minds, let’s take an updated look at our affordability index charts for the counties around Puget Sound.

As of March, affordability has now fallen to its lowest level since November 2008, and as has been the case for quite a while, it would be considerably worse if not for the current absurdly low interest rates.

Median home prices have already begun their annual spring bump, while interest rates have ticked up slightly. The affordability index for King County currently sits at 90.7.

Record-High Home Prices Are “Affordable” Thanks To High Incomes and Low Rates

As promised in yesterday’s affordability post, here’s an updated look at the “affordable home” price chart.

The “affordable” home price hit an all-time high of $551,493 in May, thanks to increasing incomes and decreasing mortgage interest rates. The “affordable” home price of $551,493 in King County would have a monthly payment of $2,006.

If interest rates were at a more reasonable level of 6 percent (which is still quite low by historical standards), the “affordable” home price would be just $382,986—about $103,000 lower than it is today.

Low Rates Continue To Prop Up Affordability

It was recently requested that I take a refreshed look at the affordability stats, so here’s an updated look at our affordability index charts for the counties around Puget Sound.

As of May, affordability is still not great for home buyers, but it would be much, much worse if not for the current absurdly low interest rates.

Low Interest Rates Barely Keep Affordability Reasonable

Let’s have an updated look at our affordability index charts for the counties around Puget Sound.

As of October, affordability is still bad, but not terrible for home buyers. Median home prices have dipped just slightly in the last few months…

Actual Home Prices Edging Above the “Affordable” Price

Here’s an updated look at the “affordable home” price chart.

In this graph I flip the variables in the affordability index calculation around to other sides of the equation to calculate what price home the a family earning the median household income could afford to buy at today’s mortgage rates if they put 20% down and spent 30% of their monthly income.

The “affordable” home price hit $496,051 back in April, but has since dropped off…

Affordability Will Be Destroyed if Interest Rates Increase

Don’t forget, you can get access to the spreadsheets used to make the charts in this and other posts by becoming a member of Seattle Bubble. It’s been a few months since we took a look at the local affordability index. So, let’s have a new look at all of our affordability index charts. As […]

Low Rates Add $120K to the “Affordable” Home Price

As promised in yesterday’s affordability post, here’s an updated look at the “affordable home” price chart. In this graph I flip the variables in the affordability index calculation around to other sides of the equation to calculate what price home the a family earning the median household income could afford to buy at today’s mortgage […]