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985 Households Priced-Out of Clark County Housing Market with Each $1,000 Price Increase
The Building Industry Association of Clark County (BIA) estimates that 35,605 Clark County families will be priced-out of purchasing a home in 2021.
This estimate comes from the newest version of a study conducted by the National Association of Home Builders (NAHB). The study states that for each $1,000 increase in the cost of median-priced newly built homes in Clark County, 985 prospective buyers will be pushed out of the market, up from 781 prospective buyers in 2020.
“This study illustrates how even a relatively small increase in housing prices can dramatically impact housing affordability and accessibility for our neighbors,” said BIA’s Executive Director Avaly Scarpelli. “Unfortunately, with lumber prices on the rise again and the recent implementation of the Washington State Energy Code, housing affordability will continue to worsen in 2021.”
Between mid-April and mid-September 2020, the cost of framing lumber climbed more than 170%. According to NAHB analysis, this resulted in an increase of more than $16,148 in the price of a new single-family home. Lumber price increases will result in an additional 15,905 buyers being priced-out of homeownership, up from our estimate of 12,612 in 2020.
If the estimates provided by the Building Industry Association of Washington are correct, the price of a newly constructed home will rise as much as $20,000 due to the implementation of a stricter Energy Code, effectively pricing-out another 19,700 families.
When considering the increase in lumber prices and the cost of energy code compliance, a total of 35,605 buyers will be priced-out of purchasing a home in 2021.
This estimate does not take into consideration the other variables that can increase home prices: additional regulatory barriers, labor shortages, and the looming rise of interest rates as soon as 2022. All of these factors work together to prevent families from achieving their dreams of homeownership.
“Our elected leaders need to recognize and take accountability for the consequences of their policy decisions. We cannot complain about a housing affordability crisis and then pass policies negating any efforts made to make housing more attainable. The homebuilding industry agrees with the notion of increasing energy efficiency and working towards more sustainable structures. However, when the families in our county and state cannot afford to have a roof over their heads, it’s time for our elected officials to consider postponing expensive mandates,” added Scarpelli.