Benton County most affordable in state for first-time home buyers

A framing crew works recently on a new home in the Ridgeline Estates housing development near the intersection of Southridge Boulevard and West 41st Avenue in south Kennewick.
A framing crew works recently on a new home in the Ridgeline Estates housing development near the intersection of Southridge Boulevard and West 41st Avenue in south Kennewick. Tri-City Herald

Looking to buy your first home? Benton County may be the best place to start looking.

The county is the most affordable county in the state for first-time home buyers, according to a recent report from the University of Washington’s Runstad Center for Real Estate Studies.

The ranking is based on data assuming first-time buyers have a lower income and down payment than a typical family and are purchasing homes below the $202,000 median price for the county.

“That’s a huge opportunity,” said Peter Orser, the Runstad Center’s director, noting that overall the housing market is strong and still has plenty of ground to make up since the Great Recession.

Our market is now positioned as a ‘hot market’ for sellers.

Claude Oliver of Tri-Cities Realty Group

But across the Columbia River, Franklin County has one of the worst affordability rates for first-time buyers, which Tri-City real estate officials said they haven’t experienced.

“I don’t really see a difference to be honest,” said Gina Alvarez, a loan originator with Vision Mortgage in Kennewick. “For a while there was a lot more affordability in Pasco, as far as the homes were concerned.”

Overall, the housing market is strong in the state and in the Mid-Columbia. Building permits for new single-family and multi-family homes are steady or increasing. Sales of new or existing homes also are solid. There were 771 homes listed for sale in October, the latest month with available data, marking one of the lowest housing inventories in recent years.

“Our market is now positioned as a ‘hot market’ for sellers,” said Claude Oliver of Tri-Cities Realty Group based in Pasco.

771 Number of Mid-Columbia homes listed for sale in October and considered low inventory

That’s part of the reason some real estate experts were surprised at the different affordability ratings between Benton and Franklin counties.

Benton County has a Housing Affordability Index of almost 121 for first-time buyers, while Franklin County’s is nearly 68. The index measures the ability of a family to afford mortgage payments. A score of 100 means a family is just able to meet that burden.

Home affordability has declined for first-time buyers throughout the state, the UW report indicates, with the state average declining from nearly 86 earlier this year to just under 79.

“This means that a household earning 70 percent of the median household income — as may be true of first-time buyers — had only 78.8 percent of the income required to purchase a typical starter home nationwide,” according to a UW news release about the report.

Franklin County’s rating still makes it more affordable than King County on the west side of the Cascades Mountains at 58, but lower than similar ratings for neighboring counties such as Walla Walla, Adams, Grant and Yakima counties.

But Alvarez said her experience in recent years has been that most first-time buyers gravitated toward homes in Pasco because they tended to have lower prices than similar houses on the other side of the river. Median prices — the price that sits in the middle of the total pricing range — and overall affordability are exactly the same, according to the UW report. Down payment programs are offered in the three main cities and offer the same assistance. Interest rates are still relatively low.

“They will look anywhere they can find a house they can afford,” said Lola Franklin, CEO of the Tri-City Association of Realtors.

That isn’t to say first-time buyers aren’t facing challenges when looking for homes in the Tri-Cities, real estate industry officials said. While some don’t come in financially prepared to buy a house, the biggest issue seems to be understanding how personal credit can affect the deal, specifically when it comes to interest rates and mortgage payments.

“They still come in not really knowing a lot,” Alvarez said.

But agents and others take steps to get prospective buyers ready, through classes and consultations. Some agents work with people for as long as a year to help them get them ready to buy a home.

“We just try to get them educated,” Oliver said.

What could be a bigger challenge is the strong market in the Tri-Cities. Low inventory increases competition for what’s available and there’s a particular dearth of homes in a price range from $120,000 to $160,000.

That limits options and means it could a while longer than planned to find a dream home.