WA State: Housing Affordability Index
The Housing Attainability Index, a Washington-based resource, reveals a concerning reality: homeownership is unaffordable for 80% of Washington families in March 2025. This study highlights a significant disconnect between the income required to qualify for a median-priced home and the actual earnings of most households in the state. While the median home price stands at $596,514, requiring an annual income of $183,619, the average Washington household earns only $94,605, approximately half of what's needed.
This affordability crisis disproportionately affects low- and middle-income households, forcing them to allocate over 30% of their income to housing, potentially leading to financial strain on other essential needs. The study emphasizes that ensuring housing for all income levels is crucial for an equitable economic landscape, preventing displacement to less desirable areas or longer commutes.
The Housing Attainability Index utilizes a modified mortgage affordability formula based on FHA guidelines, considering 28% of income for mortgage payments and a 3% down payment. It incorporates county-specific data from sources like the Census Bureau, Bureau of Labor Statistics, and Zillow, accounting for variations in median home prices, property tax levy rates, and average credit scores across Washington's counties. The analysis, based on a 6.7% average interest rate (as of February 11, 2025), reasonably concludes that approximately 80% of Washingtonians cannot afford a median-priced home as their income falls below the required threshold.
The index further breaks down affordability at the county level, illustrating significant disparities. For instance, counties like San Juan, Snohomish, and King show particularly low affordability rates, while more rural counties like Garfield and Adams have higher percentages of families able to afford the median home price within their region.
The report also addresses the plight of middle-income earners, such as teachers and firefighters, who are increasingly priced out of the market despite earning median incomes or even in dual-income households. Existing affordable housing programs often focus on lower income brackets, leaving a gap for those earning between 80% and 120% of the Area Median Income (AMI).
To address this crisis, the report offers several policy recommendations. Expanding funding for the Connecting Housing to Infrastructure Program (CHIP) to support broader infrastructure projects, rather than on a project-by-project basis, could lower development costs. Additionally, extending down payment assistance programs to higher AMI thresholds is crucial for maintaining homeownership opportunities for middle-income families.
The report also critiques current energy code revisions, arguing that costly mandates like solar panels and heat pumps go beyond national standards and increase housing costs. It suggests focusing on practical and cost-effective energy conservation measures. The failure of Senate Bill 5429, which aimed to increase private sector representation on the State Building Code Council (SBCC), is noted as a missed opportunity to bring practical expertise to address housing affordability.
In conclusion, the Housing Attainability Index paints a stark picture of the housing market in Washington, emphasizing the urgent need for comprehensive policy solutions that address affordability challenges across all income levels, streamline development processes, and ensure a more balanced approach to regulations impacting housing costs.