Is Relief in Sight for Spokane Residents?
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With a hot home buyer’s market and ongoing shortage of new construction, home builders are troubled by a growing crisis in housing: People in middle and lower-income brackets are increasingly priced out of the market for home ownership.
“Legislators are considering a number of bills this session that will significantly increase the cost of new homes,” said Tracy Doriot, 2021 president of the Building Industry of Washington. “Many of the bills have worthy goals. However, they also have significant consequences.
“Every $1,000 increase in the cost of building a new home prices more than 2,500 people out of the market in Washington,” he said. “We’re asking legislators to also consider the effects of their policies have on preventing more and more people from attaining the American Dream of home ownership.”
Homes drive household wealth
The National Association of Home Builders recently shared a report citing home ownership as the primary driver of household wealth. Across all racial and ethnic demographics, people’s homes were their largest asset.
Every $1,000 added leaves 2,500+ households behind
The NAHB also released its 2021 Priced-Out Estimates, showing how higher home prices and rising interest rates affect people’s ability to buy new homes.
In Washington state, the median home price is $522,023, requiring a minimum income of $112,295 just to qualify for a mortgage. At that price point, more than 72% of Washington’s roughly 3 million households are priced out already. And for every $1,000 in additional costs, 2,524 more households are unable to qualify for a new mortgage.
Washington’s housing affordability pyramid shows how many households are priced out at various price points above and below the median price.
“By adding more and more regulation, legislators, sadly, are telling those in the disadvantaged, lower and middle economic classes that they will not be able to own a home,” explained Doriot.