PSRC’s Regional Housing Strategy: 2023 Monitoring Report shows key indicators for housing affordability are not improving in the region.
Median rent in the central Puget Sound has increased by 50% from July 2015 to July 2023, that’s $1,500 to $2,300 a month.
Housing prices have outpaced rent increases by nearly doubling in the same time frame, with the median home’s value jumping from $353,000 to $700,000.
Homeownership costs have been impacted by rising interest rates. Even though home prices dropped in the past year, interest rates have risen 11 times since March 2022. From June 2021 to June 2023, the typical mortgage interest rate increased over 100%. Combined with a 9% increase in home prices during that same period and assuming a 20% downpayment, the required household income for the median home has risen from $105,000 to $164,000 in those two years, an increase of over 55%.
Renters are experiencing higher rates of being cost-burdened, which occurs when over 30% of a household’s income is used to cover housing costs. Most renter households earning less than $75,000 were cost-burdened in 2021. Severe cost-burden, when over 50% of household income is used to cover housing costs, has also significantly increased among renters. Between 2010 and 2021, the percentage of severely cost-burdened renter households earning between $35,000 and $50,000 increased from 10% to 27%.
Cost-burden is an even bigger issue for people of color. A majority of Black, Hispanic/Latinx, and Native Hawaiian/Other Pacific Islander households pay over 30% of their income on housing. Learn more in our February 2023 Trend, Housing Affordability and People of Color.
The region has a current backlog of about 50,000 housing units. These missing units squeeze housing supply and contribute to high costs and cost-burden. PSRC estimates that 800,000 new housing units are needed to accommodate the region’s needs through 2050. View PSRC’s Regional Housing Strategy: 2023 Monitoring Report to learn more.