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Home down payments out of reach as Clark County’s high rents challenge middle-income families

Home down payments out of reach as Clark County’s high rents challenge middle-income families

After renting a $6,000-a-month home in San Diego, Crystal Bowling never expected she would have trouble finding housing in Clark County — especially after her husband found a better-paying job.

She knew that moving costs and the birth of her baby would likely change her family’s financial situation. But she never imagined they would be crammed into a recreational vehicle in Ridgefield with three children — a 13-year-old girl, an 8-year-old boy and a 10-month-old boy.

Desperate for more space, the family spent nearly $3,000 on fees for houses and apartments. Saving and qualifying for a down payment was further out of reach.

“We were almost homeless — that’s the sad part — and he makes good money,” said Bowling, 38, referring to her husband’s job in construction.

Much has been made of how Washington’s housing crisis has affected low-income families, as well as middle-class families like the Bowlings.

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Middle-class families are in a pinch, says Mike Wilkerson, who teaches real estate at Portland State University and is director of analytics at ECOnorthwest, a Portland-based economic consulting firm.

“Those households are not able to save for down payments, especially in recent decades,” Wilkerson says. “The price of houses has gone up, so the amount you need to save for a down payment is just getting bigger and bigger.”

That is difficult in an era of high rents and inflation. About a quarter of families earning between 80 and 100 percent of the area median income (about $97,500 to $122,000 for a family of five in Clark County) are burdened by their rent, according to a National Low Income Housing report 2022 Coalition.

This is especially the case for families with children.

Bowling said she feels like Clark County’s housing costs aren’t the only factor keeping her family from stability; the price of groceries, school supplies and clothing has also risen in recent years.

“It’s not about not having enough money. It’s about constant spending,” she said.

Washington ranks third in the nation for annual child spending, according to a 2023 report from LendingTree, an online lending marketplace. The researchers estimate that raising a child in Washington costs about $28,000 a year.

After buying their RV for $50,000 and living in it for a year, the Bowling family recently moved into an $1,860-a-month two-bedroom apartment in Ridgefield, the only apartment that would accept them after their credit score dropped to 580 , Bowling said. . She and her husband missed three credit card payments after having their baby, and applying for dozens of homes in a short period of time also negatively affected their credit. The score hasn’t gone up since they paid off the debt, she said.

Landlords can charge a higher security deposit if a household doesn’t meet the desired credit score, which is usually above 670, according to the credit scoring company FICO.

“I know why people are homeless. There are just too many obstacles. There’s a point where you just want to give up,” Bowling said. Tears streamed down her cheeks as she bounced her baby.

Bowling and her husband would like to buy a house and settle in Clark County so that stability can return, but they can’t anticipate saving enough money for a down payment.

Like the housing market in the broader Portland metro area, Clark County’s is competitive. The median home sales price in April was $522,000 – $17,000 higher than this time last year.

“Homes over a million dollars are not nearly as competitive in terms of aggregate demand as homes in that $400,000 to $600,000 range, which is more like the price point for first-time homebuyers today,” Wilkerson said.

Homes between $400,000 and $600,000 averaged about half of all home sales in Clark County per month by 2024, according to reports from the Regional Multiple Listing Service.

In the past, people could get by with a down payment of 5 percent of the cost of the house. But in this competitive market, 20 percent is often needed, Wilkerson said.

“In recent decades that wasn’t necessarily the case,” he said.

Established in 2022, Clark County’s Down Payment Assistance Loan Program helped first-time homebuyers with down payment assistance, but money quickly ran out. The Bowling family would make too much money to qualify anyway.

“The system isn’t working for us,” Bowling said. “If you’re experiencing financial hardship, there shouldn’t be so many hoops to jump through to achieve peace.”