Why a $22 Minimum Wage Still Can’t Buy a Home in Seattle

Seattle’s minimum wage will increase to $22.14 an hour in 2027, making it one of the highest minimum wages in the country—but it’s still not enough for many to afford to live there.

A Seattle minimum-wage employee working full time next year will make $46,051 annually—or $1,747 more than they do at the city’s current minimum wage rate of $21.30 per hour.

Washington state boasts some of the highest wage floors in the country. The overall state-level minimum wage is $17.13, but several cities across the state boast minimum wages $4 to $5 higher.

In 2014, Seattle passed a minimum wage ordinance that guaranteed employees $11 an hour and instituted an automatic annual increase based on inflation. Today, the city’s rate is almost three times the federal minimum wage of $7.25, which hasn’t increased since 2009.

But despite its relatively generous wage laws, Seattle remains a perilously difficult place for many low-income workers to find housing.

Rachel Smith is the president of the nonprofit coalition, Washington Roundtable. Earlier this year, they collaborated with Kinetic Research on Prices We Pay, a report on affordability across the state.

“Housing is part of a broader affordability challenge, and that challenge is driven in part by the rising cost of doing business here,” Smith tells Realtor.com®. “For most people trying to buy a home in Seattle, a higher minimum wage in isolation is unlikely to materially change their ability to purchase one.”

According to their research, Washington is the fifth most expensive state to buy a home, and prices for everything from food to healthcare have risen faster than the national average.

In Seattle, household spending outpaced inflation across all categories from 2014 to 2023, with housing among the fastest-growing categories. Housing and utility costs rose 71% over the decade.

Minimum wage workers remain locked out of homebuying

So what would it take for a minimum-wage earner to afford to buy a home in the city?

The median listing price in Seattle actually decreased this past year by around 1.2%, but it’s still at $749,950, nearly double the national median.

At that listing price, a homeowner who was able to put down 20% on a 30-year fixed mortgage at current interest rates would have monthly payments of $3,935. If a homeowner spent the recommended 30% of their income on a mortgage, that would require an annual income of $157,400.

Realtor.com senior economist Jiayi Xu calculates that “a two-earner minimum wage household would need to work 71 hours per week per person—nearly double full-time employment—to afford the median home in Seattle.”

Extrapolating from that, a single minimum wage earner would need to work a truly impossible 142 hours a week to afford a home at current prices.

“Seattle’s elevated minimum wage of $22.14 per hour is helpful to improve rental affordability for low-wage workers,” Xu says. “However, homeownership remains out of reach for many. While a higher minimum wage alleviates housing burdens, significant barriers remain to asset-building homeownership for minimum wage workers in high-cost metros.”

Even if a minimum-wage worker found something below the median listing price, other barriers to entry remain, says Jesse Sheldon, a broker with Gordy Marks Real Estate at Re/Max Northwest.

“Two full-time minimum-wage earners could theoretically afford around a $325,000 purchase with 3% down at current rates. There are roughly 300 two-bedroom-or-larger condos in King County around that price range right now, so technically there are options,” he says.

But qualifying on paper and actually being ready to buy are different things.

“Saving the down payment is hard at that income, and HOA dues can turn an inexpensive condo into a payment that no longer makes sense,” he adds.

Seattle’s housing market isn’t alone in being prohibitively expensive for minimum wage workers. A 2022 study from LendingTree analyzing data from the U.S. Census Bureau’s 2021 American Community Survey and the U.S. Department of Labor found that homeownership was out of reach for minimum wage workers in every state.

Renting on a minimum wage in Seattle

So will the extra $1,747 per year meaningfully impact minimum wage employees looking to rent?

Well, perhaps.

Seattle’s median rent is $1,895. That means a renter in a two-worker household making the current minimum wage would need to work 36 hours per week to comfortably afford their half of rent and still have money for other expenses. At the rate going into effect on Jan. 1, that drops slightly to 34 hours.

“The minimum wage increase may make renting a little easier, but it doesn’t meaningfully close the gap between renting and owning,” says Sheldon. “Two people both working full time at Seattle minimum wage can make a pretty decent life, particularly if they work in the city but live farther out. Before they bring kids into the picture, at least.”

A single minimum wage worker looking for housing would qualify for subsidized housing through the city’s Housing Authority, however.

A person looking for a one-bedroom apartment would pay a maximum of $1,233 per month, “or about 32% of their monthly gross income” says Nona Rayburn, the communications manager for Seattle’s Office of Housing.

Sheldon sees the struggle minimum wage workers face in finding housing as connected to the city’s broader affordability crisis.

“You can earn a good living in Seattle and still be a very long way from affording a single-family home,” he says. “The minimum wage increase may make renting a little easier, but it doesn’t meaningfully close the gap between renting and owning.”