If you're thinking about buying or selling a home in Washington State, or even just curious about how things are going, you've come to the right place. I've been keeping a close eye on the Washington State housing market, and I'm here to break down what's happening right now and give you an idea of what we might see in 2025 and 2026. The good news? The market is showing signs of stabilizing, with a slight increase in sales and prices, alongside a welcome jump in available homes.
This report dives into the latest numbers, giving you the facts you need to make informed decisions. Let's get started!
Washington State Housing Market Trends in 2025
Home Sales
First off, let's talk about how many homes are actually changing hands. According to the Washington Center for Real Estate Research, in the second quarter of 2025, we saw a pretty solid increase in existing home sales. Compared to the previous quarter, sales were up by a significant 47.4%, reaching 21,257 units. When we look back a year, sales were up 2.1%. This is a good sign, showing more people are actively buying and selling.
Looking at the breakdown by county in the WCRER report, there's a lot of variation. For instance, Asotin saw a huge jump in sales quarter-over-quarter (230.8%), while Adams County saw a decrease of 16% year-over-year. King County, a major player, experienced a 53.5% increase in sales quarter-over-quarter, but a slight dip of 3.4% year-over-year. This highlights how important it is to look at specific areas, not just the statewide picture.
Home Prices
Now, for the million-dollar question (sometimes literally!): what's happening with home prices? In the second quarter of 2025, the statewide median sales price for a single-family home went up to $675,600. That's a 0.9% increase compared to the same time last year. While this might not seem like a huge jump, it shows that prices are holding steady or even creeping up a bit in many areas.
We're seeing price increases in 11 out of the 16 metropolitan counties. Lincoln County, for example, saw a pretty impressive 21.6% increase year-over-year. However, it's not all good news for sellers everywhere. Ferry County, for instance, saw prices drop by 39.3% year-over-year, though this is based on a smaller number of sales, so it can be a bit more volatile. King County remains the most expensive, with a median price of $1,028,800, followed by San Juan County at $1,019,200. On the flip side, Ferry County has the lowest median price at $185,000.
Are Home Prices Dropping in Washington?
Based on the latest data, it doesn't look like home prices are globally dropping across Washington State right now. While some specific counties or neighborhoods might see slight decreases, the statewide median price actually went up by 0.9% in the second quarter of 2025 compared to a year ago. The big story is more about stabilization and modest growth rather than a significant downturn. It's important to remember that real estate is local, so while the overall trend is positive for prices, individual areas can differ.
Housing Supply
This is where we see some really encouraging news for buyers! The number of homes available for sale, also known as inventory, increased significantly. At the end of the second quarter of 2025, there were 21,077 single-family homes for sale. That's a big jump of 71.3% from the previous quarter and a 37.5% increase from a year ago.
What does this mean? With more homes on the market, buyers have more choices and potentially a bit more breathing room. This increased supply helps to ease some of the intense competition we've seen in recent years. As you can see from the data on page 13, the months of supply are currently at 3.0, meaning it would take about 3 months to sell all the homes on the market at the current sales pace. This is up from 2.6 months last quarter and 2.02 months last year. A higher months of supply generally indicates a more balanced market.
Is Washington a Buyer's Housing Market?
Right now, Washington State is leaning more towards a balanced market, with some areas still showing strong seller advantages. The significant increase in housing supply is definitely giving buyers more power. They have more options to choose from, and the intense bidding wars that were common a year or two ago seem to be cooling down in many places.
However, it's not a full-blown buyer's market across the board. In highly desirable areas like King County, demand can still outstrip supply, giving sellers an edge. Also, with median home prices still high, affordability remains a challenge for many, which can temper buyer demand. So, while buyers have more choices, sellers in desirable locations can still expect strong interest.
Market Trends
Here's a summary of the key trends we're seeing:
- Increased Sales Volume: More homes are being sold, both quarter-over-quarter and year-over-year.
- Moderate Price Growth: While not booming, prices are generally holding steady or seeing small increases.
- Rising Inventory: More homes are available for sale, which is good news for buyers.
- Affordability Challenges Persist: Despite increased inventory, high home prices and mortgage rates (though they are starting to trend down) still make it tough for many to afford a home. The statewide affordability index for median-income buyers is at 60.7, meaning they only have 60.7% of the income needed to buy a median-priced home. For first-time buyers, it's even tougher, with an index of 43.3.
- Building Permit Activity is Up: New construction is also on the rise. Building permits were up 3.0% year-over-year, with 8,916 new units authorized. This could help boost supply further in the future.
Impact of High Mortgage Rates
High mortgage rates have been a significant factor in the housing market. As of September 4, 2025, the average 30-year fixed mortgage rate is around 6.5%, and the 15-year fixed rate is about 5.6%. While these rates are still higher than the record lows we saw a couple of years ago, they are trending down.
This downward trend is creating more optimism. For potential buyers, lower rates mean more affordable monthly payments, which could encourage them to enter the market. For current homeowners, falling rates also mean more opportunities to refinance their existing mortgages, potentially saving money. The share of mortgage applications for refinancing has actually reached nearly 47%, which is the highest it's been in a while.
The good news is that continued economic growth, along with moderating house prices and rising inventory, generally bodes well for both buyers and sellers. Forecasts suggest that the 30-year fixed mortgage rate might end 2025 between 6.0% and 6.5%.
Washington State Housing Marke Forecast for 2025 and 2026
Predicting the future is tricky, especially with the housing market! However, based on the current trends and expert analysis, here's what I think we can expect for Washington State in 2025 and 2026:
2025 Forecast:
- Continued Market Balancing: We'll likely see the market continue to balance out. The increased inventory should help ease some of the pressure on buyers, while stabilizing prices will be beneficial for everyone.
- Slightly More Sales: With mortgage rates expected to remain in the 6.0%-6.5% range and inventory growing, we should see a modest increase in the number of home sales compared to 2024.
- Moderate Price Appreciation: Expect home prices to continue to rise, but at a more sustainable pace. We're unlikely to see the double-digit appreciation rates of the past.
- Affordability Still a Hurdle: While rates may fall slightly, affordability will remain a key issue, especially for first-time buyers, due to the high cost of homes.
2026 Forecast:
- More Predictable Market: By 2026, the market could become even more predictable. We might see further growth in housing starts as builders respond to demand, which could add more supply.
- Potential for Increased Buyer Activity: If mortgage rates continue to stabilize or even dip further, and if wages keep pace with housing costs, we could see an uptick in buyer activity.
- Regional Differences Remain: It's crucial to remember that different parts of Washington will likely experience different trends. Major metro areas might see faster appreciation and higher demand, while more rural areas could have different dynamics.
Here's a little table to summarize the potential outlook:
| Metric | 2025 Outlook | 2026 Outlook |
|---|---|---|
| Home Sales | Modest increase | Continued steady activity, potential for slight increase |
| Home Prices | Moderate, sustainable appreciation | Continued steady appreciation, likely in the low single digits |
| Housing Supply | Continued increase, helping balance the market | Stabilizing or further modest increases |
| Mortgage Rates | Expected to end year between 6.0% – 6.5% | Potentially stable or slightly lower, depending on economic factors |
| Affordability | Remains a challenge, but slightly improved by rates | May see slight improvement if wages rise or rates fall further |
| New Construction | Continuing to increase | Steady pace, helping to meet demand |
It's important to note that these are just projections, and unforeseen economic events can always shift the market. Factors like inflation, job growth, and even major policy changes can impact housing trends.
Overall, the Washington State housing market is in a period of transition. The frenzy of a few years ago has calmed down, replaced by a more balanced environment. For buyers, the increased inventory is a welcome change, though affordability is still a key consideration. For sellers, the market remains generally favorable, especially in high-demand areas.
Keep an eye on those mortgage rates and local market conditions, and you'll be well-equipped to navigate the Washington State housing market in the coming years!
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