Housing Affordability in Washington  

Introducing Washington State’s Housing Affordability Index   


The Housing Affordability Index is a new Washington-based resource for understanding the extent to which county-level housing markets are providing a range of choices that are affordable – and thus, attainable – to the state’s workforce.  

Originally, the home building industry has always relied upon the National Association of Home Builders “Priced-Out Report” to communicate the health of local housing markets. With construction costs escalating at record-high levels due to an aging workforce and supply chain shocks, the number of families priced-out with each $1,000 of added cost of building a new home is less important to the industry in a market that seems to be getting expensive at every level – from building materials to the regulatory landscape.  


Executive Summary  

Housing was the theme for the 2023 Legislative Session and the legislature passed a handful of bills that aim to make housing less expensive to build, and therefore less expensive to purchase (or rent). Even so, much work is to be done if the state is to add one million homes that Washingtonians can afford by 2043.  

The impact of unaffordable housing is felt most acutely by low- and middle-income households, who often struggle to afford basic necessities because housing costs consume more than 30% of their monthly income. It’s not just important that our state provides housing units for everyone that lives here but it’s also important for ensuring an equitable economic landscape, as those who are unable to afford housing in desirable areas may be forced to move to less desirable locations or commute longer distances to work.  

In this study, we find that home ownership is unaffordable for 88% of Washington families, based on the median-priced home of $621,100. 


Methodological Approach, Assumptions, and Limitations 

To complete this study, we used the 30-year Federal Housing Administration (FHA) mortgage loan product, rather than a 30-year conventional loan product. Our reasoning for doing so is that this loan product is the lowest barrier into homeownership as it allows households with lower credit scores and downpayments to be approved for a mortgage.  

As the cost to build a home gets more expensive and as interest rates continue to increase (or at least maintain levels above 4%), conventional loan products will be much harder to qualify for as they likely will need a substantial downpayment and/or a much higher income than the area’s median income level.   

We gathered data from publicly available sources including the United States Census Bureau, Redfin, and Zillow. After gathering data, we completed calculations for determining affordability based on the following data assumptions:  

  • Average credit score range for Washington consumers is 720-739 according to Experian.  
  • Home sales price by county as reported by Redfin’s Market Report – most recent data set available at time of data pull, typically one month behind in reporting.
  • Property tax averages by county in 2022 as reported by Smart Asset. These averages are based upon median home value and the median annual property tax payment per county. As such, homes assessed at higher than the median home value will be less affordable to buyers. 
  • Interest rate is pulled at time of the index update. The most recent update includes the FHA interest rate of 7.401% and was pulled on August 7, 2023.
  • Monthly debt payments vary significantly from household to household. Therefore, we did not include debt within our assumptions.
  • For homeowners’ insurance, we utilized Zillow’s reported monthly average for Washington, $1,446. 
  • Homeowners’ association (HOA) fees vary by household and for purposes of this report, we did not include this fee in the modeling.

Utilizing these assumptions, even though they’re not free from limitations, help us tailor affordability rates to each county’s economic reality, rather than holding all variables constant across the state. Accounting for county differences is crucial to providing the most realistic illustration of affordability for each county.  



In the Housing Affordability Index table in the proceeding pages, you will find crucial information useful for understanding the health of the state’s housing market. This information, along with the variables that comprise the index, can be found in the appendix as well. For now, we will turn the discussion to key findings.


Policy Implications and Recommendations  

While many of the variables that make up the housing market are largely out of the state and local governments’ control, there are a number of variables we can control with logical public policy to ensure homeownership opportunities can persist for generations to come.  

Funding for Workforce Housing  

The Growth Management Act (GMA) mandates counties plan for housing for all levels of the economic ladder. Further, it defines workforce housing as housing units that are affordable to households earning between 80% to 120% of AMI. There are some programs that service households earning up to 80% but few, if any, programs exist for households that earn between the AMI levels of 80% and 120%. Expanding downpayment assistance to those making higher thresholds of AMI will be crucial for keeping the American Dream of homeownership alive.  


Regulatory Reform 

  1. The easiest solution to our state’s housing underproduction quandary is reforming the GMA. Various housing policy scholars and academics have concluded that state growth management acts are responsible for about half the cost of added costs to home prices since their inception. Perhaps unsurprising due to the artificial – and sometimes arbitrary – constriction of land.  
  2. A re-examination of some building codes that don’t impact the safety or wellness of occupant(s) is necessary. Codes that disrupt the supply chain and add significant cost to the end-user (home buyer or renter) but do not improve the life safety or personal health of the occupant(s) should be questioned as to their appropriateness in being placed in the code instead of in legislation.   
  3. Developing single- and multi-family housing units is a risky business, full of uncertainty and unforeseen obstacles. Any process improvements from the state and local governments at each area of interaction between the government and project owner will be important to creating a more predictable building environment. More predictability will bring shorter construction timelines and reduce costs for the buyer or renter.  



Anthony, J. (2006). State Growth Management and Housing Prices. Social Science Quarterly, 87(1), 122–141. Accessed at http://www.jstor.org/stable/42956113 

Edmunds. (2023). “Auto Loan Interest Rates Hit Highest Level Since 2008 and Drive Record Share of $1,000+ Monthly Payments in Q1.” Accessed at https://www.edmunds.com/industry/press/auto-loan-interest-rates-hit-highest-level-since-2008-and-drive-record-share-of-1000-monthly-payments-in-q1-according-to-edmunds.html  

Horymski, C. (2023). Experian Research. “Average Consumer Debt Levels Increase in 2022.” Accessed at https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/  

Horymski, C. (2023). Experian Research. “What is the Average Credit Score in the U.S.?” Accessed at https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/ 

Inspection Support Network. (n.d.) “Cities with the Worst HOA Fees.” Accessed at https://www.inspectionsupport.com/resources/cities-with-the-worst-hoa-fees/  

Redfin. (2023). Housing Market Report [Each County]. Accessed at https://www.redfin.com/state/Washington/housing-market  

Seattle Housing Authority. (n.d.) “Income Level – Housing Choice Voucher Program.” Accessed at https://www.seattlehousing.org/housing/housing-choice-vouchers/eligibility/income-level-housing-choice-voucher-program  

Smart Asset. (n.d.) “Washington State Property Tax Rates.” Accessed at https://smartasset.com/taxes/washington-property-tax-calculator  

The World Bank. (2022). “The World by Income and Region.” Accessed at https://datatopics.worldbank.org/world-development-indicators/the-world-by-income-and-region.html#:~:text=The%20World%20Bank%20classifies%20economies,%2Dmiddle%2C%20and%20high%20income 

U.S. Department of Housing and Urban Development. (2022). “FY 2022 Income Limits Summary: Seattle-Bellevue, WA HUD Metro FMR Area.” Accessed at  https://www.huduser.gov/portal/datasets/il/il2022/2022summary.odn  

Washington State Department of Commerce. (2023). “Washington State will Need More than 1 Million Homes in Next 20 Years.” Accessed at https://www.commerce.wa.gov/news/washington-state-will-need-more-than-1-million-homes-in-next-20-years/  



Date of First Publication: May 1, 2023
Prepared by Andrea Smith, MPA
Washington Housing Research Center

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