Located on Puget Sound and surrounded by mountains, Seattle offers access to natural beauty while providing plenty of amenities. Its diverse economy, supported by the presence of large tech companies like Meta, Google, Microsoft and Amazon, also brings in money and the wealthy people who earn it. According to the U.S. Census, Seattle has the third-highest median household income of the 50 largest U.S. cities, at $124,473.
So it’s no wonder Seattle retains its status as one of the country’s most desirable locations, ranking second on the Best Places to Live on the West Coast and second among the 25 Best Places to Find a Job.
But it’s also home to one of the most expensive housing markets in the country, and that’s likely to be the case through 2025 as the Emerald City faces a limited housing supply and slowdown in building permits due to high interest rates and unaffordability. According to Redfin, the Seattle housing market is very competitive. The number of homes sold increased 15% year over year. Even though homes on average receive just two offers, in 2024 they sold in around 39 days, compared with 31 days in 2023 though only 16% sell over list price.
— Trends
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“Seattle continues to attract people due to our strong economy with high-paying jobs, especially in the tech sector,” Gina Madeya, Seattle King County Realtors vice president of governmental and public affairs, wrote in an email. “Many prospective new buyers are moving from California. The Seattle market is more affordable by comparison for these buyers.”
Using information from the U.S. News Housing Market Index, we’ve compiled the information you need to get a grasp on the current state of the market. Read on for details of how Seattle’s housing market has changed in the last year and what you can expect in 2025.
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How the Seattle Housing Market Changed in 2024
The latest data shows a 22% decline year over year in single-family permits approved in November 2024. However, for the first 10 months of 2024, there were 8% more single-family permits approved than in the same period in 2023. In fact, since March 2023, single-family permits followed a predictable pattern of approximately 500 permits issued each month until dropping below 400 in November.
Single-family permits hit an annual high of 601 in April and low of just 387 in November. That contrasts markedly from February 2023, when the number of permits hit a 10-year low of 352, following a seasonal slowdown, but its also far below the 700 to 900 permits a month often issued in 2022 and the 10 years prior.
While no longer volatile, single-family permit trend lines reflect a slower market. In 2024, the number of single-family permits issued from January through October were nearly 11% lower than those issued in the same period in 2022 and 27% lower than permits issued in the first 10 months of 2021. In other words, single-family housing permits performed slightly better than in 2023, but remain well below the number of housing permits issued over the past decade.
Meanwhile, the number of multifamily housing permits for buildings with at least two units has increased significantly year over year. Multifamily housing permits saw a 45% increase in November 2024. However, in the first 11 months of 2024, multifamily permits dropped 7% compared with the first 11 months of 2023, and dropped 44% from the same period in 2022.
Most recent data shows 867 multifamily permits issued in November 2024, up 45% year over year from the 598 permits issued in November 2023.
In 2024, multifamily housing permits hit an annual high of 1,795 in March, well below the highs of more than 2,000 permits approved in 2022. Twice, in June and August, the number of multifamily permits issued dipped to 443 and 460 — still above the 10-year low of 227 in February 2019. However, overall, the number of multifamily permits has been decreasing since 2023.
“Development starts for apartments are lower than in the years prior to the pandemic,” wrote Madeya. “5+ unit activity has slowed substantially providing room for absorption of existing inventory. Meanwhile, duplex permits are up and far surpassing the long-term average.”
Seattle Housing Supply and Demand
The Seattle market has just 1.5 months of housing supply as of November 2024, based on the HMI, which is lower than the 3.1 months of housing supply for the entire U.S. housing market and below a healthy inventory of four to six months for a balanced market.
Housing Supply | 1.5 mo (+0.09 YoY)
Furthermore, housing supply in the Seattle market has decreased in the last year — in November 2023, there were 1.6 months of supply.
“Seattle and Washington state are woefully behind on housing supply,” says Madeya. “Supply is not meeting demand in any form. Many otherwise would-be sellers feel locked in by their low interest rates causing them to stay in their home, which adds another challenge for buyers.”
Rental vacancies in Seattle were at 6.2% as of September, a 1.4% increase compared to September 2023, but holding steady in recent years, according to data from the U.S. Census Bureau. That’s in line with the U.S. national average of 6.3%, up 0.4% year over year.
Rental Vacancy | 6.2% (+1.4% YoY)
The Mortgage Bankers Association data for December 2024 shows mortgage applications for new home purchases increased 8.9%compared with a year ago. Compared to November 2024, applications decreased by 3%.
“First-time homebuyers remained active in the new home segment, as existing inventory for starter homes remains tight,” said Joel Kan, MBA’s vice president and deputy chief economist in a press release. “The monthly decrease in applications was consistent with typical seasonal patterns. MBA’s estimate of seasonally adjusted new home sales fell in December but remained slightly above last year’s sales pace.”
Consumer confidence in the U.S. News Housing Market Index, based on the Survey of Consumer Sentiment from the University of Michigan, is up year over year, showing a 10.5-point increase to 71.8 in November 2024, as well as increased confidence in the current state of the economy.
Consumer Sentiment | 71.8 (+10.5 YoY)
Seattle Median Home Price
The median home price for single-family homes in the Seattle market in November 2024 was $815,000, a 5.2% increase year over year, based on Redfin data. According to Redfin, most homes sold at list price, with just 20.4% of homes sold above list price — a 6.5-point decrease year over year — and only 26.2% of homes experiencing price drops, 3.7 points less than in 2023. https://www.redfin.com/city/16163/WA/Seattle/housing-market
Seattle’s housing market is priced far higher than the national median — $430,000 — itself a 5.4% increase year over year.
Median Price | $815k (+5.2% YoY)
Seattle’s median rent is also high, at $2,221 as of November 2024, 2.6% above the same month in 2023, based on Zillow data.Nationally, the median rent is $1,983.
Median Rent | $2221 (+2.6% YoY)
Unemployment Trends in Seattle
More than 2.16 million people were employed in nonfarm positions in November 2024 in the Seattle-Tacoma-Bellevue metro area, a decrease of 26,100 with an unemployment rate of 4.4%, according to data from the U.S. Bureau of Labor Statistics.
Employment | 2.16M (-26.1k YoY)
Unemployment is up 0.5% year over year, but still relatively low and in line the national unemployment rate of 4.1% in October.
Unemployment | 4.4% (+0.5% YoY)
Delinquencies and foreclosure
activity remain low in the Seattle area as well, based on information from Black Knight Inc. Just 1.8% of mortgages are delinquent in the metro area, and 0.2% have active foreclosure filings — a sign that Seattle’s economy continues to produce paychecks that support its high mortgages and rents.
Seattle Builder Confidence
Homebuilder confidence has been low since mortgage interest rates started rising in early 2022. As of October 2024, builder sentiment was at 44 out of 100, down substantially from a high of 91 points in March 2022, but up by 2 points year over year.
Construction jobs in the Seattle market are down year over year. There were 129,300 construction jobs reported in November 2024 — a decrease of 4,500 since the same month in 2023, according to the Bureau of Labor Statistics.
Construction costs have decreased 1.8% year over year, but still remain high, nearing the 200 mark.
Builder Sentiment | 39.00 (+3 YoY)
Construction for nonresidential buildings may have more volume in the future, based on the Architecture Billings Index from the American Institute of Architects. The Index score is 54.3 for November 2024, up 14.8 points year over year.
Architectural Billings | 54.30 (+14.8 YoY)
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Seattle Real Estate Market Predictions
Ahead of the Federal Reserve’s most recent cut to interest rates on Dec. 18, Madeya described Seattle as “more of a balanced market” that was “swinging toward buyers,” with recent activity stemming from an anticipated drop in interest rates.
While the Fed did announce a quarter point cut to interest rates, it also suggested that the pace at which it will reduce rates next year would be cut in half. And the average 30-year-fixed mortgage APR is 6.96%, nearly unchanged from a year ago. Historically, mortgage rates have remained at or above 6% nearly every decade since 1971, aside from the period following the Great Recession, according to data from Freddie Mac, which could signal a new normal for the housing market.
“Though there’s longer market time and slower acceleration of prices, our market still statistically favors sellers,” Madeya wrote in 2025. “Last month, Eastside median home prices reflected a 7% year over year increase and 29% of all sales went above asking for a median difference of 14%. In Seattle, prices grew 6% year over year and 17% of last year’s sale recorded above their asking price.”
While some buyers are able to move forward with their purchasing plans, “inventory and affordability continue to be challenges for the majority of interested buyers,” said Madeya.
Through March 2025, the U.S. News Housing Market Index forecasts an average of 599 single-family housing permits per month, keeping in line with its established pattern of approximately 500 or so monthly permits since March 2023. The five-month forecast for single-family permits has been close to actual reported numbers over the past year.
For multifamily housing permits, the HMI five-month forecast anticipates approximately 839 multifamily housing permits in March 2025 — a 53% decrease from the outlying peak of nearly 1,800 permits approved in March of 2024. However, it’s a reasonable forecast considering the volatility of recent months, with as many as 1,208 multifamily permits in October 2024 and as few as 460 in August 2024.
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Seattle Housing Market Forecast originally appeared on usnews.com
Update 01/21/25: This story was published at an earlier date and has been updated with new information.
