What is an affordability gap anyway?

By September 5, 2017News, Publications

An AFFORDABILITY GAP is the difference between the median selling price of homes and the amount purchasers (earning median household income) can afford to pay for them.

Normally, purchasers with fixed wages are limited to a target purchase price of roughly 3 times their annual wages. In 2016, over 87% of all homes sold in Blaine County were in excess $187,000—which is the target purchase price for working families earning the median wage. A home priced in excess of the target purchase price creates an affordability gap. In Blaine County the gap is large and a major impediment to home ownership.

According to the Blaine County Housing Authority’ s 2016 Annual Report the annual median household income for Blaine County was $62,489 (for all household sizes). This sum will allow a purchaser to buy a home for approximately $187,000. According to the Blaine County Board of Realtors, the median price for a single family home in Blaine County is $400,000. This leaves an affordability gap of $213,000!