With strong home sales and rising prices this year, Whatcom County’s affordability index is dropping.
This area’s housing affordability index was 129.9 percent in the third quarter of 2013, according to a report released earlier this week by the Runstad Center for Real Estate Studies at the University of Washington. While higher than the real estate bubble days of six years ago, it’s down significantly from earlier this year.
The affordability index measures the ability of a typical family to make payments on a median-price home.
With Whatcom's latest index number, a family earning the median income has 29.9 percent more income than the bare minimum required to qual-ify to buy a median-price home with a 20 percent down payment and a 30-year mortgage. Along with home sales price and income, interest rates are factored into the index.
Whatcom’s peak for this 19-year index was in the first quarter of 2013, at 159.2. That dropped to 150.9 in the second quarter. During the housing bubble, Whatcom’s affordability index dropped into the low 80s.
The Housing Affordability Index has dropped across Washington. The statewide number last quarter was 144.4, down from 177.2 earlier this year. Along with rising housing prices, a rise in the mortgage interest rate was a factor, said Glenn Crellin, associate director of the center. While house-hold incomes are increasing a bit across the state, they are not offsetting the other increases, he said in a news release.
According to the report, the median price for homes sold in Whatcom County last quarter was $272,400, up 7 percent compared to a year earlier. The median price across the state of homes sold was $263,400 in the third quarter, up 8.4 percent from a year ago.