Next Steps: The Updated Housing Availability and Affordability Study for Kootenai County 2023
This is a 2023 update of the 2021 housing market study of Kootenai County including her cities and towns. Its purpose is to provide 2023 analyses and metrics and to offer next steps going forward.
The updated study is driven by data and stakeholder input. Housing needs differ depending upon income levels and overall housing availability. Although this study examines housing needs at all levels of income, its primary focus is on middle-income Kootenai County households. The study is intended to provide an understanding of the needs so that stakeholders in the region can develop policies and housing solutions to meet these needs.
The Housing Study is primarily focused on:
• Regional population and demographic trends.
• The current supply of housing, supply constraints, and a forecast of housing needs in the future across a range of incomes.
• The sharply increasing demand and subsequent housing price and rent increases.
• Key economic drivers and the economic base of the economy.
• Updated regional input from stakeholders’ interviews and surveys.
• Consequences of failure to address the housing shortage to the future economy.
Key Takeaways – 2023 Update
• Idaho’s population continues to lead the nation, ranking only behind Florida in growth from 2021 to 2022. The rate of growth may be slowing.
• Idaho ranked 2nd in the nation in cumulative median housing price increases (2012 to 2022) at 226% only behand Nevada (244%).
• Idaho housing prices continued to rise through about the second quarter of 2022 and then fell in some Idaho counties due to high mortgage rates, but with considerable volatility. In some counties, prices initially fell and then began to recover and stabilize in spring-summer 2023. There is no indication that Idaho housing prices will significantly decline overall once mortgage rates stabilize.
• As of 6/30/2023, Idaho ranked 12th in the nation in terms of the highest-“typical “single-family housing price, ($443,638). This is significant because Idaho has been known for affordable housing prices.
• The median Kootenai County housing prices increased 139% from 2016 to 2023. The average price has increased by 160%
o Median 2016: $220,000 Median 2023: $525,000
o Average 2016: $256,000 Average 2023: $665,000
• Approximately 44% of Kootenai County households cannot afford to pay the July 2023 average market rent of $1,580, based on a 30% gross monthly income ceiling. These families are paying more than 30% of their income for housing and some are paying more than 50%.
• Mortgage interest rates have been steadily increasing in the last couple of years creating additional financial distress on home affordability. Rates were about 3.18% in November 2021 and have increased to 6.96% in July 2023 and are on track to exceed 7% by August 2023.
• The lack of affordable housing has resulted in 1) a loss of 5,340 jobs in the local economy; 2) a reduction of $535.6 million in gross regional product; and 3) a loss of $435.4 million in local payroll, and 4) $28.0 million in total lost taxes (Chart 1).
Chart 1: Updated 2022 Economic Impacts of Lack of Housing Availability
Economic Impacts
Employment -5,340
Sales -$833,460,164
GRP -$535,560,949
Payroll -$435,410,400
Fiscal Impacts (Tax)
Property -$5,938,531
Sales/Excise -$9,668,578
Income -$12,376,821
Total -$27,983,930
• For every 1% that mortgage rates increase, the capitalized value of a home that a family can afford will drop by about $50,000 (holding household income and monthly mortgage payments constant) in the long run. A family able to afford a $500,000 home at 3.18% interest is only able to afford a $325,500 home at 6.96% interest, holding household income constant at $87,926 (Chart 2).
Chart 2: Effect of Increases in Mortgage Rates on Housing Affordability for a Household Earning $87,926.
• As of July 2023, only 20% of Kootenai County households could afford to purchase a median priced house of $525,000 using this study’s financial model at 6.96% mortgage rate. Approximately 80% of the Kootenai County households are currently priced out of the market.
• Previously, at 2016 housing prices (just seven years ago), about 75% of Kootenai County households would be able to afford a median priced house and only 25% of the households would not be able to afford housing. .
• In Chart 3 (below) an annual income of $40,993 was all that was necessary to purchase a Kootenai County 2016 medium-priced home of $220,000 at a mortgage rate of 3.4%. By 2023, a medium home price was $525,000 and an annual income of $94,204 was needed at an interest rate of 3.4%. At the current mortgage rate of 6.96% the annual income needed is $130,636.
Chart 3: Annual Income Required to Purchase a 2016 Medium Priced Home and a 2023 Medium Price Home at 3.4% Interest, and a 2023 Home at 6.96% Mortgage Interest Rate.
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