News Release: Increasing rent, rising cost of living push homeownership further out of reach
August 18, 2022
Increasing rent prices and the rising cost of living drive homeownership further and further out of reach for renters in Washington. A new report released by the Building Industry Association of Washington provides more detail.
While individuals can’t control some of these economic factors, BIAW President Joseph Irons said the state must address its growing housing shortage, increasingly stringent energy code requirements and unnecessary taxes and fees on utilities and telecommunications to make homeownership more affordable in Washington.
Housing shortage contributes to increasing rent
“Renters in our state are priced out of becoming homeowners due to barriers to building new single-family homes and missing middle housing,” Irons said. “For many, the rental market is designed to be a step on the path to homeownership.
“As the cost of living increases, people’s ability to save for a down payment gets harder and harder, trapping more potential homeowners in the rental market,” he explained. “This drives prices up for everyone. To release the pressure on the rental market, we must tackle the housing shortage and build more homes people can afford.”
Minimum of two years’ savings required for down payments
A new report ranks Washington’s average annual salary as “the third highest in the nation after Massachusetts and New York” at $68,740.
However, according to BIAW’s latest study, a median-priced home in Washington selling for $643,400 requires an annual household income of $171,890 and a minimum down payment of roughly $19,000.
Based on the average savings rate in Washington, a household would need to save for roughly two years just to afford the down payment.
And this doesn’t factor in additional costs like new clothing, cleaning supplies, medications and other related necessities. Nor does it include basic costs associated with purchasing a home like inspections, appraisals and closing costs.
BIAW urges action to address unnecessary and inflexible building requirements
In late July, BIAW sent a letter to Gov. Jay Inslee, urging him to join them in proposing solutions to address the state’s housing shortage and associated costs driving up the price of homes in Washington.
In light of the rising challenges renters face, not only in paying their increasing rental costs, but in saving enough to afford to purchase a home, BIAW continues to urge the governor to commit to a meaningful approach to the state’s housing crisis.
“To truly address the state’s housing shortage, Gov. Inslee needs to find ways to reduce all the costs government has added to the home building process,” Irons said. “It’s going to take more than zoning reform to make real progress. BIAW stands ready to assist him, which is why we’ve offered concrete solutions to help more families afford the American dream of owning a home.”
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The Building Industry Association of Washington is the voice of the housing industry as the state’s largest trade association with nearly 8,000 member companies. The association is dedicated to ensuring and enhancing the vitality of the building industry so more Washington families can enjoy the American Dream of owning a home. Learn more at: www.biaw.com