‘Pent-up demand.’ Home building surges, but $440K prices still a barrier
Maybe it’s the mild winter, or maybe it’s an influx of new businesses bringing jobs to Tri-Cities.
For those reasons and more, housing starts are surging in the Mid-Columbia, according to first quarter building statistics compiled by the local chapter of the National Association of Home Builders.
Home building is picking up nationally, but the Tri-Cities stand out.
Local builders secured 402 permits for single-family homes from building authorities in the first three months of the year.
That’s half again more than the 266 permits issued at the same time in 2025 and 12% ahead of the six-year average.
The numbers include townhomes, which are permitted individually as single homes.
“It’s been one of the strongest years since 2021,” said Jeff Losey, president of the Home Builders Association of Tri-Cities, which tracks housing starts and other construction trends.
Losey cautioned that conditions have changed since early 2025.
A year ago, the market was acting with caution as Donald Trump begin a second term as president and embarked on trade deals based on protectionist tariffs that raised the cost of imported goods.
The Elon Musk-led Department of Government Efficiency worked to cut government and invited federal workers to leave their jobs.
“When you’ve got people in the community who are being asked to retire or face being laid off, that can have a chilling effect,” Losey said.
A year later, buyers are stepping up, giving builders confidence to work through a myriad of issues, from interest rates and tariffs on construction materials including lumber to labor costs and availability, he said.
The national home builder association said the monthly gains in housing starts is a good sign in a recent news release.
“Overall, the uptick in housing starts is a positive development for residential development and signals that the sector may be stabilizing, said Bill Owens, chairman of the association and a home builder in Ohio.
Residential housing market
The residential market has softened slightly even as home building takes off. There are more houses to choose from — about 1,000 at the moment — and the average and median prices are slightly depressed.
The median price for a Tri-Cities home in March was $440,000, down 1% from the prior month.
The average price of $470,000 is down 4% from the previous month, according to Tri-Cities Association of Realtor statistics.
Prices continue to challenge affordability.
A buyer who puts 20% down on a $440,000 home would need $88,000 to close the deal and would need an annual income of up to $130,000 to afford a 30-year mortgage.
The average annual wage in Washington was $95,160 in 2024.
The Washington Employment Security Department is expected to update 2025 figures in June.
Richland leads the market for housing starts, with 129 permits issued in the first quarter.
Pasco had 91, Kennewick 77, West Richland 30, Prosser 28, unincorporated Benton County 27, Benton City 11 and unincorporated Franklin County 9.
The new construction had a combined value of $138.5 million, 41% more than a year ago.
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Dave Retter, owner of Retter and Company. Sotheby’s International Realty, agreed 2026 is off to a strong start with good through open houses and buyers making offers, “in spite” of the war in Iran and interest rates that bouncing around.
“We have a lot of pent-up demand in the Tri-Cities,” he said. “We’re going to have a very prosperous summer activitywise.”
Dennis Gisi, owner of John L. Scott Real Estate offices in the Mid-Columbia, said the usual constraints still apply. Homeowners who would have traded in starter homes aren’t moving up because they don’t want to give up ultra-low mortgages interest rates.
Despite that, buyers still have to adapt to job changes, retirements, births and other changes in life circumstances. The market is pretty tight, he said.
He credits economic development officials at the Ports of Benton, Kennewick, Pasco, Walla Walla and Morrow (Boardman, Ore.) along with the Tri-City Development Council (TRIDEC) for putting the Tri-Cities on the business map and sparking the uptick in home building.
“Thank all the economic development people who are bringing people in for jobs. They’re good jobs, steady jobs,” he said. “It’s all because of jobs and demand.”