While we are seeing the market show signs of improvement and uptick in activity in Q4 2025, the biggest challenge we see in the real estate market is affordability. Prices in our area have remained stable after many years of appreciation, and interest rates, while improving, are hovering around 6.25%. This combination has monthly payments expensive, especially for first-time buyers and buyers on fixed incomes, such as retirees, seniors, or people looking to retire and fix their overhead.

In fact, the latest Profile of Homes Buyers and Sellers by the National Association of Realtor (NAR) shows that the rate of first-time buyers is at an all-time low, accounting for only 21% of all buyers. The median age for this group increased to age 40, the highest ever. This illustrates that affordability is putting pressure on this group and delaying their start to building long-term household wealth. The average net worth of a renter versus a homeowner is staggering, so this is an important obstacle to overcome for those who have the resources but find themselves on the bubble of this decision.

I have helped buyers overcome affordability challenges by applying some creative house hacking strategies. These are powerful tools, as they can empower a person to become a homeowner instead of renting, putting them on the path to building household wealth much faster. Plus, Greater Seattle Area rents are costly, so if one can find a way to pay their own mortgage instead of their landlord’s, they will start to build a nest egg of security for their own future.

A common myth we see is that buyers think they need 20% down to buy a home. That is simply not true, according to NAR, the average down payment for a first-time buyer was 10%. While a 20% down payment can eliminate mortgage insurance, there are loan programs such as FHA and some Conventional programs that only require 3-5% down. There are also down payment assistance programs that are available that result in 0% down, and VA financing can be as low as 0% as well.

Speaking of down payments, I see buyers diversify by utilizing or borrowing against stocks and/or 401K funds, and the NAR survey revealed 26% of first-time buyers used these types of funds to achieve their homeownership goals. It is also not uncommon for some fortunate buyers to receive gift funds in order to achieve homeownership, and the NAR survey showed 22% of first-time buyers were able to utilize this route. With the big picture of building household wealth in mind and the fact that everyone needs a roof over their head, having your home be a part of your investment portfolio makes sense.

House Hacking Tips for First-Time Buyers

The “Live in One, Rent the Rest” Starter Play

Shop 2–4 unit properties (duplex/triplex/fourplex). When you buy a multi-unit property and live in one unit, you get to enjoy owner-occupied financing rates. You can live in one of the units and rent the other(s) to help offset your mortgage payment. This could even allow for a lower down payment. It is important to calculate your potential monthly payment and assess rental rates in the area to figure out how having a renter(s) would help offset your monthly overhead. Also, consider if you had a vacancy, could you still make it work while you tried to fill it.

If the numbers work for your monthly cash flow, this is an excellent way to obtain homeownership. Down the road, you are building equity while someone else helps pay down your mortgage. Further, if you wanted to eventually move on to another property, you could sell this and reap the equity for a larger down payment or keep the property (at the owner-occupied financing rate) and rent all the units.

ADU Options

Seattle allows up to two ADUs per lot, and no owner-occupancy requirement (you don’t have to live there forever to keep it legal). Parking requirements are relaxed, too. Outside of Seattle these zoning requirements vary, but this is a rising trend.

You could buy a home with an existing ADU (detached cottage, basement unit, garage studio). Or buy an “ADU-ready”: daylight basement + exterior door, or garage with alley access. Start by renting a room or partial suite now, then add/finish an ADU later when cash allows.

Rent-by-the-Room to Offset Overhead

One roommate can take the edge off your payment; two roommates can be a full-on subsidy. When shopping for a home, prioritize layouts that naturally separate space (split-levels, basements, mother-in-law setups). I’ve seen some buyers already know who their roommate will be, so they can shop with confidence and also be comfortable with their living situation.

Purchase with a Trusted Partner with Similar Housing Goals.

Pooling funds for a down payment and sharing the monthly overhead is a great way to obtain homeownership with a trusted partner. This could be a close friend, family member, or domestic partner. You would ideally need to commit to at least 3-5 years of sharing the mortgage to build equity and avoid selling too early, and having a written agreement outlining the exit strategy is key. Based on average annual appreciation rates, 3-5 years would offset any selling costs and provide equity growth outside of something catastrophic happening in the market. This is a great way to protect your savings, build wealth as a team, and not throw money away on rent.

I knew two young women who pooled their savings to buy a home, and they also placed a roommate in a basement bedroom to help offset the mortgage. They later sold that house when they both got engaged and were able to buy great long-term homes with their partners using the equity they built. This partnered approach on their first home put them on the path to stability, security, and flexibility for their futures.

Buy a Cosmetic Fixer

Many buyers prefer homes that are “done” and fully updated. Those homes often come at a premium because they have a larger buyer audience. If you are willing to live with dated finishes or an unfinished space, you have the opportunity to build sweat equity with improvements you can make down the road when you can afford to.

It is important that you look for a home that’s structurally sound, as those can be expensive items to remedy, such as electrical, plumbing, roof, etc. Hiring a trusted inspector to perform proper due diligence is an important step. A dated kitchen or bathroom is a livable situation, and these homes build equity over time, too. If a home has an unfinished basement, there is an amazing opportunity to finish that space in the future and gain a higher value. Plus, you could rent this finished space to help offset the expense.

Buy a Fixer

There are renovation loans available, such as an FHA 203(k), that can be used to do more extensive repairs, additions, and updates. These loans provide funds to make improvements after closing. They are very detailed loan programs that require further scrutiny on value through appraisal and contractor bids, but can be successful in bringing a broken-down home to a livable structure and on the path to building equity. You have to be hearty and resourceful for these projects, so heed caution when considering this option. I have a great list of vendors and contractors that can help.

Most importantly, you must consider the Triangle of Buyer Clarity when shopping. Whether you are house hacking or just buying your first home without any of these creative solutions, being realistic about what you can afford is paramount. The relationship between location, price, and features/condition matters! Buyers must be flexible with their wants and understand that in reality, they typically get 70-75% of what’s on their wish list. Such as buying a townhome instead of a single-family home, settling on a location a little further away, or choosing a home that is not perfectly updated. However, they get a house and an opportunity to build wealth! This wealth-building game is a step-by-step process with every home a stepping stone over time.

As you can see, this triangle is not a perfectly balanced triangle, some sides are adjusted more than others. A buyer may have to reduce the number of features they would like in order to obtain the price and/or location they desire. This gets them on the path of equity growth, though, so compromise and flexibility are key! You need to get clear on your goals and adjust the triangle to make it work.

In my next newsletter, I will touch on house-hacking tips for multi-generational households. This can be helpful for first-time buyers as well as retirees who are on fixed incomes. This helps families stay together and avoid the high cost of assisted living. In the meantime, if you are curious about how these house hacking tips can help you or someone you know, or you’re just curious about the market, please reach out. It is always my goal to help keep you informed in order to empower strong decisions.

The recently announced proposal of implementing a 50-year mortgage product had tongues wagging last week. There were countless articles, posts and news stories that jumped on the story. There was lots of debate about whether this type of product would be a smart choice in the long term, even though it provides a lower monthly payment. It is not a mystery that the biggest challenge in the real estate market is affordability, and that finding a way to lower monthly payments could help.

Bear in mind that this is speculative at this point, and would require policy changes that would take a year or more to complete if it is decided that this product will be brought forward. And of course, a trusted mortgage professional will provide the best insights; I have a curated list if you would like one. However, I thought it was important to discuss this as it relates to the affordability challenges we are facing in today’s real estate market. In addition, I see it as an opportunity to provide alternative solutions and highlight the benefits of homeownership. So here goes.

The median price for a single-family residential home in King County has increased by 39% since October 2020 and by 20% for condos. In Snohomish County, the median price for a single-family residential home has increased by 33% since October 2020 and by 42% for condos. This, coupled with higher interest rates, has caused monthly payments to jump up, sidelining some buyers.

For example, the median home price for a single-family residential home in Snohomish County in October 2020 was $570,000, and the interest rate for a 30-year fixed conventional loan was 3%, equaling a monthly principal and interest (P & I) payment of $1,922.51 based on a 20% down payment. Currently, the median home price in Snohomish County for a single-family residential home in October 2025 was $755,000, and the current rate for a 30-year fixed conventional loan is 6.25%, equaling a monthly P & I payment of $3,718.93 based on a 20% down payment. This comparison illustrates that monthly P & I payments have increased by 93% since 2020, almost double.

The good news is rates are down 1.66% from the 7.91% peak in October 2023 and down .75% from 7% since May of this year. That, along with decelerated price appreciation, has improved affordability, making now a better time than we have seen in the last two years to buy. The biggest obstacle is putting the historically low rates of the past that are not likely to return in the rearview mirror, and find other solutions to make a purchase. Perspective is key.

The 3-4% climb in rates since the pandemic heyday did not accompany a spiral in home prices. While median home prices peaked in mid-2022 as rates reached 5.5%, prices did correct but then moderated and stabilized. Year-to-date in 2025, prices have been unusually flat year-over-year in Snohomish County and up 1.4% in King County. It appears that home prices are holding and that any decrease in interest rate will only help maintain values and likely cause them to increase.

In fact, over long historical periods, many sources cite about 3% to 5% per year average appreciation nationwide. One estimate puts a long-term average appreciation at about 4.27% per year (1967-2024) nationally. More recently, over the past 5–10 years, some data shows average annual growth closer to 7%-9% due to especially strong market gains.

So, how would a 50-year mortgage help? Adding 20 more years of term to a loan will naturally lower the payment, but it increases interest payments and equity grows slower. Let’s use this example to help understand how it all pans out.

Let’s take a $750,000 home, with a 10% down payment and a conservative annual appreciation rate of 3%. Then apply an interest rate for a 30-year fixed at 6.25% and for a 50-year fixed at 6.5%. It is important to note that a longer mortgage term typically requires a higher interest rate. The 30-year product will result in a monthly P & I payment of $4,156, and the 50-year product will result in a monthly P & I payment of $3,805, a savings of $351 per month.

While lowering the monthly payment can be helpful to qualify for a higher loan amount and/or reduce monthly overhead, a borrower needs to consider their wealth-building strategy. In the first 10 years of the loan on a 30-year term, the borrower will pay $392,336 in interest and pay off $106,396 in principal; a total of $498,732 paid. On a 50-year term, the borrower will pay $431,546 in interest and pay off only $25,064 in principal; a total of $456,610.

Based on 3% annual price appreciation over those 10 years, the home’s value would be $1,008,000. The 30-year term borrower would have $439,396 in equity, and the 50-year term borrower would have $358,064 in equity, a $81,332 difference. Both options build more wealth vs. renting, which highlights the benefits of homeownership as one of the most powerful wealth building tools.

So, who should consider this option and who should not? And when I say consider, it doesn’t mean recommend – it means knowing your options. If this option were to show up in the future, most borrowers will review all their choices and then decide which product best suits their goals. Note, for many, waiting to qualify for a 30-year term may be a better choice given their circumstances and long-term plans.

Things to Consider With a 50-Year Mortgage
It can create a different balance between affordability and long-term cost. Here are some points to think about when deciding whether it might fit your situation:

Monthly Payment Flexibility
A longer loan term can reduce monthly payments, which may make a home feel more manageable from a month-to-month budget perspective. This can be helpful for buyers who want or need lower payments early on.

High-Cost Markets
In very expensive areas, stretching the term may make purchasing a home more attainable. It can be one way to navigate markets where prices rise faster than incomes.

Cash Flow Priorities
Some buyers prefer to keep monthly costs as low as possible so they can direct money toward:

• Investments
• Savings
• Renovations
• Other financial goals

A 50-year mortgage may support that flexibility.

Long-Term Plans for the Home
If you expect to stay in the home for a long time, the slower pace of equity building may feel acceptable in exchange for a lower monthly obligation.

Age & Income Trajectory
Younger buyers with many decades of earning ahead—or buyers anticipating future income growth—may feel comfortable taking on a longer-term loan with the idea of refinancing, selling, or paying extra over time. Although if you are able to pay extra, a 30-year loan makes more sense.

Other Factors to Keep in Mind
While there can be advantages, there are also trade-offs worth weighing:

• Total interest costs will be significantly higher over the life of the loan.
• Equity builds more slowly, which may matter if you plan to sell or refinance soon.
• It may not fit well for buyers nearing retirement or those who want a rapid payoff timeline.

A 50-year mortgage can be one tool to improve affordability or cash flow, but it’s helpful to consider how the lower monthly payments align with your long-term financial goals, timeline, and comfort with the slower accumulation of equity.

Other options that can improve buyer affordability besides a 50-year term include some house hacking tricks. And the good news is these can be used now, given that the 50-year term is only a speculative, albeit one that got a lot of attention.

Some house hacking tricks that can help offset monthly payments include: buying a duplex or a triplex and living in one of the units and renting the other(s); buying with the plan to have a roommate(s) who will pay rent and offset your monthly payment; or buying with a trusted partner and sharing the monthly payment while you build equity together. In my next newsletter, during the week of Dec 8th, I will expand on these house hacking options, plus some others, and share some success stories.

Until then, the most important thing to understand is that owning real estate builds wealth faster than renting, but how long you plan to stay in the house and your loan term matters for the long-term equity picture. That is why it is important to consult with a trusted real estate professional and a skilled lender to help you organize and execute a winning, solvent plan.

As always, it is my goal to help educate and shed light on all of your options, so you are empowered to make strong decisions. If you or someone you know is curious about how today’s market trends align with your housing goals, please reach out.