Many cite affordable housing as a concern in Jefferson County. The extent of the problem is partly obscured by certain market conditions, and there  may be limits to existing remedies.

Michele Lynne Adkisson is a lender with Cardinal Financial who works with the Jefferson County Association of Realtors, giving seminars for first-time homebuyers.

During her 23 years in the industry, she’s seen interest rates lower than 4 percent, but they’re currently 6.7 to 7.75 percent, depending on buyers’ credit scores, down payments and lenders.

Even more than interest rates doubling in recent years, Adkisson asserted that average home prices are the biggest hurdle to home ownership in Jefferson County, given the median price was $611,000 in August, according to online real estate brokerage Redfin.

“Interest rates were 7.875 percent when I got into the business, and housing prices were $90,000 to $125,000 for first-time homebuyers,” Adkisson said. “That’s the part people don’t want to talk about. When my dad bought his first home in 1980, his interest rate was 10 percent. He had a VA loan, but the brand new home he purchased in Santee, California, was $99,000.”

Even with zero-down programs and downpayment assistance, Adkisson asserted lower-priced housing is needed, as she estimated most first-time buyers can only afford $150,000 to $250,000, which is why she addresses down payments and monthly costs with potential clients up front.

On a $250,000 property, a 1 percent difference in interest can add more than $400 to each month’s payment.

To those wondering how first-time buyers purchase $500,000 homes on $150,000 budgets, Adkisson explained that lenders allow housing payments, monthly debts “and anything else that shows up on your credit report” to total up to 50 percent of a buyer’s income, including insurance and taxes, but not utilities.

Adkisson added that parents and other relatives have become “a huge source” of assistance with those buyers’ down payments and loan co-signs, as increasing interest rates are fueled by the inflation rate, which she estimated went from 2.4 percent in 2021 to 9.7 percent in 2022, before decreasing to 4.2 percent in 2023.

“If we’d let that continue, we would have imploded or exploded,” Adkisson said. “But how long will these rates hold out? There’s no crystal ball. The Fed says inflation is not where they need it to be, which is 2 percent, so they’ll keep raising the rates, or hold them steady, until they meet that goal.”

Adkisson recalled how, after lending rates peaked at 18 percent in the mid-1980s, it took more than a decade for them to retreat below current rates, but she believes home prices can be lowered, although it might take the Federal Reserve cooling the economy by causing record-low unemployment to increase again.

Adkisson also cited the recent surge of short-term rentals, marketed via VRBO and AirBnb, as contributing to increased real estate prices, in part by taking single-family homes off the market, to which Port Angeles responded by imposing a moratorium on purchasing short-term rentals, effective June 16.

Habitat for Humanity moderates the situation, but is no cure.

Jamie Maciejewski, executive director of Habitat for Humanity of East Jefferson County, explained that their homes on Landes Street sold for $198,000 for a two-bedroom, and $226,000 for a three-bedroom, even though they appraised for roughly twice as much.

“We set prices for each Habitat development individually,” Maciejewski said. “Our homes are sold under Habitat's ‘permanent affordability’ program, where the buyer purchases the house and leases the land.”

In exchange for low-cost homes, Habitat’s buyers agree to limit their future appreciation, and receive financing through the USDA or another lender such as HomeSight, at below-market interest rates that recently reached 4.5 percent.

“They also frequently receive down payment assistance,” Maciejewski said. “Monthly payments vary, and include principal, interest, taxes, insurance and a monthly ground lease fee, since the buyer purchases only the house, not the land.”

Habitat buyers also pay into a repair reserve fund, that helps with future large maintenance costs, and homeowners’ association fees as applicable, although Maciejewski noted the monthly payments don't exceed one-third of the buyer's gross monthly income.

The income needed to purchase a Habitat house is 40 percent to 80 percent of the area median income, adjusted for household size, which Maciejewski said encompasses “a broad segment” of the local workforce, including retail workers, caregivers, nonprofit employees, construction laborers, massage therapists, educational assistants, office workers and bus drivers.

Although Maciejewski didn’t have answers about which income level could cause people to lose support for childcare and SNAP benefits, she noted that Habitat’s twice-monthly meetings answer a number of other questions, for which those interested may sign up at habitatejc.org/homes online.