Screenshot from Google Images

Screenshot from Google Images

Hot housing market forces out many first-time homebuyers

Housing experts concerned about the long-term impacts on generational wealth.

Home values continue to spike in King County while the increases in median income have remained marginal over recent years, causing concern among housing experts and advocates about the impact on first-time homebuyers.

The Coalition For More Housing Choices studied the affordability of homes in a few East King County cities using the relationship between home values and median income to generate an index that evaluates the affordability of homes in these communities.

According to the Composite Housing Affordability Index created by the Washington Center for Real Estate Research, 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.

On the Composite Housing Affordability Index, Bellevue scored 70.7, Kirkland scored 80.8 and Redmond scored 82.3.

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.

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.

“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.

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.”

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.

“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.

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.

Orser said these kinds of people have strong buying power in conjunction with low interest rates that have “fueled” parts of the market.

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.

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.

He said not having equity through owning a home can have somewhat of a generational domino effect, stifling economic mobility.

“Not owning a home could mean not being able to send your kids to college,” Orser said.


In consideration of how we voice our opinions in the modern world, we’ve closed comments on our websites. We value the opinions of our readers and we encourage you to keep the conversation going.

Please feel free to share your story tips by emailing editor@bothell-reporter.com.

To share your opinion for publication, submit a letter through our website https://www.bothell-reporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 300 words or less, we won’t ask you to shorten it.

More in News

Stock photo
State AG Ferguson leads effort supporting local journalism

Federal legislation offers tax credits to subscribers, businesses and news organizations

C-17 at Joint Base Lewis McChord airstrip (courtesy of United States Military)
King County councilmember proposes program to aid transition of Afghan interpreters who served the U.S. overseas

Program would provide job training and learning opportunities for Afghan interpreters and advisors.

Vaccinations taking place. File photo
Inslee: No ‘massive disruptions’ as worker vax rates hit 90%

A surge in vaccinations has eased concern about service slowdowns ahead of a Monday deadline.

King County Councilmember Kathy Lambert (file photo)
Lambert removed from King County Council leadership roles

Lambert received backlash after her campaign used flyers that depicted her opponent as a puppet.

Union members picket in front of new Facebook campus in Redmond on Sept. 16 (photo by Cameron Sheppard)
Northwest Carpenters Union members vote to accept contract with AGC

The agreement comes after weeks of striking.

King County Councilmember Kathy Lambert (file photo)
After doubling down on “racist” flyer, Lambert publicly apologizes

Apology encouraged by King County Council colleagues.

Pixabay image
School psychologist among three charged with immoral communication with a minor

Redmond detectives conducted an online predator sting using fake profiles.

Courtesy of King County Police Officers Guild
Office lacks power over King County law enforcement in misconduct investigations

Director Tamer Abouzeid presents OLEO annual report to law and justice committee on Tuesday.

Photos of drug bust and Fury the K9 unit (courtesy of King County Sheriff's Office)
King County Sheriff’s Office confiscates over $1 million worth of deadly fentanyl during drug bust

With help from a search dog, officers found 97,000 fentanyl pills and eight pounds of heroin.

Most Read