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Indicator: Housing Affordability Gap

Data and Data Discussion provided by King County Benchmark Program

Home Purchase Affordability Gap for the Average King County Homebuyer

Housing Affordability Gap For Median Income Home Buyers King County 1998-2004

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Upstream Indicators
  •   Income Distribution --- In the two decades between 1979 and 2007, income has shifted from the four lower income groups to the highest income group.   (view data graph)
  •   Ratio of Jobs to Housing --- Despite small changes in the jobs-to-housing ratio in each of the four counties, there has been relatively little change in the jobs-to-housing ratio in the region over the last 14 years.  (view data graph)
  •   Urbanization and Impervious Surface Changes --- The number of acres of urban land, clear-cut, and regenerating forest have increased in King County since 1986. Acres of grass and deciduous, mixed and coniferous forest have decreased. Acres of rural forests and privately owned working forests have declined in recent years  (view data graph)
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Downstream Indicators
  •   Estimated Number and Percent of Homeless Persons --- From 2000 to 2004, the number of homeless increased nearly 30% to 6,852. On the one night count for 2008, that number had risen to 8,439, an 8% increase over 2007 figures. (Survey methods were changed in 2006.) Of these, nearly one third, including children, were sleeping outside in below freezing weather, an increase of 15% over the previous year. (1) The current emergency system and transitional housing system has approximately 6,700 beds. (2)  (view data graph)
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Related Goals

Sustainability Snapshot:

The gap between the mortgage or rent payment that a typical household can afford and the median price of housing on the market is filled by many things - excessive personal debt, anxiety, long commutes, more hours at work, and fewer hours with family and friends. As the gap grows, more and more people in the region pay more than 30% of their income for housing or live where they can afford, but not where they would like.

Sustainability Trend:

The ratio of median income sales price to median household incomes has increased in all four Central Puget Sound counties from 1995 to 2007. (2) Median income levels generally have kept better pace with increases in average rents from 2000 to 2006. (1)

Data Discussion

The Indicator Defined

The gap between the price that a typical household can afford to pay for a home and the median price of housing on the market.

Data Interpretation/Evaluation

In 2005, the median home price in King County was $332,000; however, the median-income household could only afford a $228,100 home, resulting in a $103,900 affordability gap. In order to purchase the median-priced home, a household would need an income of almost $88,400, which is 46% more than King County's actual 2005 median household income of $60,700. While the home purchase affordability gap in 2005 is higher than in 2000, it is comparable to those found in the 1980's and 1990's.

Data Source and Limitations

1970, 1980 and 1990 median home price uses home value as proxy for sales price as reported by U.S. Census Bureau.  It excludes condominiums and may not be strictly comparable to 2000-2005 data.  The 2000-2005 median home price data taken from the King County Records, Elections and Licensing Services Division/ Recorder's Office.

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Additional Resources

  • (1) Housing Prices and Affordability, Puget Sound Trends, 2007
    This Puget Sound Regional Council fact sheet reports that, since 2000, growth in area median household incomes has been steadily outpaced by the rise in home prices. Between 2000 and 2003, the growing gap between income and home prices was offset by a decline in mortgage lending rates to historically low levels, which served to bolster housing affordability overall. But since then, we have seen a reversal of direction in lending rates occur, as well as encountered a heated housing market that produced a string of double-digit annual percent increases in home prices in all four of the region’s counties. As a result, housing affordability for home buyers, and especially first-time buyers, has declined to the lowest levels recorded since these data indices began to be tracked in the mid 1990s.
  • Out of Reach 2006
    Provides current data on affordability of rental housing units at the state and metro area levels. Data provided by National Low Income Housing Coalition.