How much house can you afford?

 

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As I told in previous post, affordability index is going down and it means that less families can afford to buy a house. First question that home buyers have is, can I afford that.

The average national home price is 240,700, and medium home price in Seattle area are is  $585,400 and with average $69,000 income per year it will be unaffordable. Convention 30 year fixed loan  requires minimum 5 percent down payment  and you income should be 52,255 to purchase home for 240,700 at national average price.  If you can put 10 percent down payment your income should be $49,504 and if you manage to save enough and ready to put 20 percent down, your income should be at least $44,004 to buy the same $240,700 house, so you got an idea. For your Information medium home price around Tacoma area is $266,600, but I don’t think that you are willing to bit traffic every day if your work is close to Seattle. By the way to buy more or less nice house house in Tacoma area  right now, you should spend at least $260,000.  To be able to buy a house you should buy something in distant area from Seattle or increase your income. Also you can consider to get cosigner on your mortgage application,  because some loan program let you do that. It might be co- borrower who lives with you and somebody who does not as well. Only condition is that he should have good credit and income, that help you increase your chances to be approved to buy more expensive property. We certainly reach the point when buy is cheaper then rent especially in current trend. You can just imaging what rental price around Seattle will be when Amazon finish construction it’s new headquarters which will be 3.3 million square  fit in size and will add another 20,000 new jobs to the area. If you have more question about what house and how expensive you can buy, feel free drop me a line, and I’ll try to answer all your questions.

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