Housing Affordability in Kitsap County, Washington

In the Kitsap County real estate market, we have been monitoring how affordability has improved for conforming conventional borrowers as a result of the reduction in median sales price and rates. Affordability for that class of buyer (admittedly limited) has improved to mid 2004 levels with the reduction in median sales price and rates. See more here.

While many pundits have argued that the relationship of median home prices to median incomes must be restored (for instance one study cites that the median home price should be about 2.8 times the median income) the NAR has argued that we should be paying more attention to the monthly mortgage payment in relation to median income. With home prices steady or falling, mortgage interest rates down significantly, and income generally trending upward, we found that our market was returning to affordability much more quickly than many articles have predicted. This doesn’t provide much relief for subprime or jumbo loan borrowers, but it’s a start.

Interesting that we haven’t yet seen any further reduction in the posted 30 year conforming rate since the recent lowering of the Federal Funds Rate. We also note that the median sales price for closed Kitsap residential sales in January appears to be headed back to the levels of last October (now about $288k, when in November and December it was about $265k) - away from affordability.

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