The Washington housing market is entering a new phase in 2026—one that favors patient, well-managed rental property owners. While affordability challenges won’t disappear overnight, next year marks the beginning of what economists are calling the Great Housing Reset: a slow, multi-year normalization of prices, demand, and affordability.
For Washington landlords, this shift brings steady rent growth, rising tenant demand, and increased regulatory attention, especially in cities like Seattle, Tacoma, Bremerton, Silverdale, Poulsbo, and across Kitsap County.
Here’s what landlords in Washington should expect in 2026—and how to prepare.
In 2026, incomes are expected to grow faster than home prices for the first sustained period since the aftermath of the Great Recession. While this won’t suddenly make homeownership affordable for everyone, it will reshape buyer behavior, keeping more households in the rental market longer.
For landlords, this means:
Washington’s constrained housing supply—especially in coastal and job-rich areas—puts local landlords in a relatively strong position compared to many other states.
While much of the national market sees modest price growth, Washington’s housing market presents a nuanced picture. The median home price in the state was around $644,200 in late 2025, slightly down year-over-year, illustrating a market adjusting to higher financing costs and slower demand.
In stronger local pockets like Kitsap County, home values climbed about 1.2% year-over-year, and median prices there are holding near the mid-$500,000s to low-$600,000s.
In Seattle, inventory remains light, with months of supply near 2.8 months, reflecting a market that still favors sellers but is more balanced than in earlier years.
This slow reset — rather than a crash — means fewer desperate sellers and more homeowners holding equity, which translates to fewer distressed sales and steadier rent demand.
Rent remains a cornerstone of Washington’s housing story. Across the state, rental rates remain well above national averages. For example, average rents in Washington hover near $2,100 per month, outpacing the U.S. average.
In Seattle proper, the average rent is even higher — around $2,088/month, roughly 28% above the national average, making the city one of the most expensive rental markets in the country.
Smaller markets like Olympia and Thurston County reflect similar pressures — rents there average between $1,650 and $2,000+ depending on unit size, and year-over-year rent growth has been noticeable at times.
Despite seasonal slowing, occupancy remains strong across the Puget Sound region with rates near 94%, underscoring continued tenant demand.
Washington remains one of the tougher markets in the U.S. for would-be buyers. As of late 2025, studies have shown that about 80% of Washington households cannot afford to buy a home at current prices and income levels.
To get a sense of the gap: an income of roughly $183,600 is estimated to be necessary to qualify for a typical FHA loan on a median-priced home statewide, far above the median household income for most Washington communities.
This dynamic helps explain why many households continue renting longer — keeping demand robust for landlords.
Housing is expensive in Washington compared to national benchmarks — overall cost of living is about 17% above the U.S. average, and housing costs are roughly 31% higher.
Because of this, Washington tenants are especially sensitive to price, location, and quality — and landlords who maintain competitive, well-managed properties will experience stronger occupancy and smoother lease renewals.
In 2025, Washington enacted new rent regulation legislation — with annual increases capped at either 7% plus inflation or 10%, whichever is lower — covering single-family homes alongside multifamily units.
While this doesn’t signal sweeping rent control, it raises the bar for compliance and strategic pricing. Landlords who stay ahead of legislative changes and price rents responsibly will be better positioned than those who react too late.
Seattle’s rental and housing market are heavily influenced by regional economic trends. Recent data shows fluctuations in employment listings and job growth — particularly in tech — which could temper buying demand but not necessarily rental demand.
Balanced employment conditions, ongoing migration to Washington’s urban and suburban markets, and slower new rental construction all help sustain strong rental fundamentals.
Steady, not spectacular, is the theme for 2026. Affordability pressures aren’t easing quickly, but they’re evolving in ways that favor long-term landlords:
Washington’s housing market in 2026 won’t be static, but the trends point to sustainable rental demand, modest price adjustments, and continued relevance for professional landlords. Investors who understand local data — and who manage properties proactively — will be best positioned to navigate this next phase of the Great Housing Reset.
The Joseph Group helps Washington landlords navigate changing markets, evolving regulations, and long-term investment strategy with confidence.