SPOKANE, Washington- For first-time homebuyers seeking affordable options, many are struggling to find homes within their budget due to increasing prices and limited inventory.
Aspen Park, one of Spokane’s newest neighborhoods, offers homes priced between $300,000 and $450,000. It is conveniently located near parks, dining, and schools such as Snowdon Elementary, Westwood Middle and Cheney High.
D.R. Horton, a builder known for entry-level homes, provides smaller, more affordable options. However, with median home prices around $420,000, buyers often need an annual income exceeding $115,000 to qualify for a home loan.
The competition is fierce at the lower price points, leading to a scarcity of available homes for first-time buyers. Rising interest rates further impact buyers’ purchasing power, reducing their ability to afford higher-priced homes.
As prices climb, newer homeowners face challenges in building equity, resulting in tighter budgets and potentially harder resale conditions.
“Not as much room to breathe. And if they need to sell it could potentially be a little bit harder because we haven’t seen enough of an increase for them to sell at and make what they owe to pay off that loan,” said Spokane Realtors’ President, Karene Loman.
Equity grows as homeowners pay down mortgages and home values increase, providing financial security. Those who purchased homes before 2020 are likely sitting on significant equity.
The state aims to increase opportunities for first-time buyers through local, state, and federal housing assistance programs. These programs are crucial for buyers who may be “income rich but cash poor,” offering down payment assistance to help them enter the market.
Cities across the country are using tax incentives to encourage affordable housing development. A Senate Housing Commission discussion on this issue is scheduled for Tuesday morning.
A pilot program called Payment in Lieu of Taxes (PILOT) reduces property tax bills to offset the cost of providing below-market units. Shoreline, Washington, is using longer tax exemptions to keep housing projects viable and affordable.
Zoning laws and minimum lot sizes in Spokane also limit new construction. Changing rural conservation zoning to residential density could allow for smaller plots and more housing development.
