Housing prices and rents growing at slower pace

But many still face serious housing cost burden

Home prices and rents in the central Puget Sound region are now growing at a more moderate pace compared to recent years.

The median home price for the Seattle-Tacoma-Bellevue metro area, which had been climbing at double-digit annual rates, increased by 2.6% over the last year (March 2018 to March 2019) to $491,800. Median rent increased at a similar rate (2.4%) to $1,930.

The housing market picture is more varied when looking at individual counties.

A recent analysis by the Seattle Times indicates that while the market for homes in the middle price range has cooled, the market for more affordable homes on the lower end of the price range remains quite heated. This is consistent with what county level data on median home prices show.

Median home prices dropped by 1.2% in King County, the region’s most expensive housing market, where buyers had faced double-digit annual increases for six consecutive years.

In relatively more affordable Kitsap and Pierce counties, median home prices continued to increase at a robust pace – 9.1% and 7.7%, respectively. Median home price increased by 4.7% in Snohomish County.

The rapid and sustained annual increases in rents over the past several years have resulted in serious housing cost burden for many of the region’s renters, with the biggest impact falling on the lowest income households.

Households are considered “housing cost burdened” if they spend more than 30% of their gross annual income on housing costs, including utilities. A household is defined as “severely cost burdened” if its housing costs constitute more than 50% of gross annual income.

More than one-third of moderate-income renter households earning $50,000 to $75,000 per year are housing cost burdened, with 3% experiencing severe cost burden. The proportion of cost burdened and severely cost burdened renters rises dramatically for lower income households.

For more data on housing affordability in the region, see our latest Puget Sound Trend.