Washington Center for Real Estate Research<\/a>, a value of 100 means that a household with a median income has exactly enough income to qualify for a mortgage on a median priced home. For example, a value of 85.0 would indicate that the household only has 85% of the income required to qualify for a mortgage on a median priced home.<\/p>\nOn the Composite Housing Affordability Index, Bellevue scored 70.7, Kirkland scored 80.8 and Redmond scored 82.3.<\/p>\n
The coalition also generated a First Time Home Buyers Affordability Index, which explains that a value of 100 means that a household with 70% of median household income has exactly enough income to qualify for a mortgage on a starter home priced at 85% of the median. For example, a value of 50.0 would indicate that the household only has half of the income required to qualify for a mortgage on a lower priced home.<\/p>\n
The same cities scored much lower on this index with Bellevue scoring 44.6, Kirkland scoring 51 and Redmond scoring 51.9, indicating how difficult it is for first time homebuyers to become homeowners in those cities.<\/p>\n
“The median price of a home is well above their ability to pay,” said Allison Butcher, senior policy analyst with the Coalition For More Housing Choices.<\/p>\n
Butcher recommended that these cities, all of which are projected to need far more housing units within the next few years, expand their housing volume with a diverse set of housing options and that they do so with an “eye for affordable housing.”<\/p>\n
Housing supply is also believed to play a part in this difficulty for first time buyers. According to the Northwest Multiple Listing Service, King County has an available supply of about 0.42 months of housing inventory for sale in King County as of May. Many industry analysts consider a four-to-six-month level as an indicator of a healthy market.<\/p>\n
“The gap between those that have and have not is spreading wider and wider,” and that can be seen in the current housing market, said housing advocate and coalition advisor Peter Orser.<\/p>\n
He said higher income, dual-earning homebuyers are pricing first time buyers out of the market with their bids. The pandemic has allowed many high income potential buyers to be untethered to the office — they would have had to commute to work, but many now work remotely. This means these higher income folks can look to move to other communities in the region that they may not otherwise have found feasible.<\/p>\n
Orser said these kinds of people have strong buying power in conjunction with low interest rates that have “fueled” parts of the market.<\/p>\n
He worries that the current market, which is so difficult for first time homebuyers to break into, may have generational economic impacts as entire generations and families will be unable to accrue wealth through home ownership and equity.<\/p>\n
Orser pointed to the impact that racist redlining and home loan policies had on preventing minority groups from home ownership as well as the buildup of generational wealth.<\/p>\n
He said not having equity through owning a home can have somewhat of a generational domino effect, stifling economic mobility.<\/p>\n
“Not owning a home could mean not being able to send your kids to college,” Orser said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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