Housing Affordability: Eastern Washington Edition

Housing affordability isn’t a one-sided problem anymore

For years, the housing conversation was framed as a simple comparison: buying builds wealth, renting is just a stopgap. In 2026, that framing no longer captures what households in eastern Washington are actually facing. Today, both ownership and renting feel expensive relative to wages. But they are not equally expensive. In many cases, the monthly cost to buy a home has widened far beyond the cost to rent a comparable place, and that gap has major implications for how long rental demand can remain durable in markets like Spokane and the Tri-Cities.

What makes the current housing environment unusual is that both renting and owning feel expensive—but they are not equally expensive. In a balanced housing market, the monthly cost to own a home is typically about 10–25% higher than renting a comparable property, reflecting the added benefits of equity, stability, and long-term appreciation. Today, that gap has widened dramatically. In many markets, including parts of eastern Washington, the monthly payment to purchase a home can be 40–70% higher than renting a similar property. This gap is largely driven by higher mortgage rates layered on top of still-elevated home prices. The result is a growing number of households who may want to buy but simply cannot make the monthly payment work—pushing them to remain renters longer than they otherwise would.

A useful way to think about this is the ownership-to-rent ratio: how much a monthly ownership cost exceeds monthly rent. On Census measures, Spokane County’s median monthly owner cost for households with a mortgage is $1,875, versus median gross rent of $1,283. That is about 1.46x. In Benton County, the ratio is about 1.53x ($1,993 vs. $1,306). In Franklin County, it is about 1.49x ($1,788 vs. $1,198). In plain English, the typical mortgaged owner is paying roughly 46% to 53% more per month than the typical renter.

That ratio matters because it helps explain why many households who want to buy still remain renters. Families don’t make housing decisions based on abstract long-term wealth creation alone. They make them based on whether the monthly payment fits their cash flow today. If the ownership payment is half again as large as rent, the hurdle is not philosophical. It is arithmetic.

The new single-family home buyer has unique problems

The gap for a new buyer can be wider still. Freddie Mac’s average 30-year fixed mortgage rate was 6.11% as of March 12, 2026. Zillow shows a typical home value of about $406,252 in the Spokane–Spokane Valley metro and $433,788 in the Kennewick–Richland metro. At that rate, assuming 20% down, principal and interest alone are roughly $1,972/monthin Spokane and $2,105/month in Kennewick–Richland. Adding a rough 1.1% annual allowance for taxes and insurance brings those estimates to about $2,344/month and $2,503/month, respectively. Compared with average rents of $1,450 in Spokane and $1,595 in Kennewick, the implied payment gap is roughly 1.62x in Spokane and 1.57x in Kennewick; even against Richland’s higher average rent of $1,750, the estimated buy payment is still about 1.43x. These are rough market snapshots, not underwriting outputs, but they show why affordability pressure is landing harder on would-be buyers than on renters.

This is also why solving for the ratio is hard in the current macro environment. The “buy” side moves with mortgage rates, insurance, taxes, and home prices. The “rent” side moves with vacancy, household formation, wage growth, and new supply. Right now, some of those forces are working in opposite directions. Mortgage rates have eased from their 2023 highs, but they remain elevated enough to keep ownership costs burdensome. Meanwhile, rent growth in parts of the country has cooled because a wave of multifamily deliveries has created more near-term options for renters. The result is a market where rents can flatten or soften somewhat without making homeownership suddenly affordable again.

The single-family housing crash of 2026

Straight to the point: it’s not going to happen. A housing crash typically requires excess supply and large numbers of distressed sellers. Today we have the opposite: a housing shortage, homeowners with significant equity, and millions of borrowers locked into low-rate mortgages they are reluctant to give up. Because of these factors, the more likely outcome is not falling home prices, but a period where prices move sideways while incomes gradually catch up.

If home prices are unlikely to collapse, the ownership-rent gap will close the way housing cycles typically resolve: slowly. Affordability is more likely to improve through incomes rising than through housing prices collapsing. Historically, affordability tends to improve when incomes grow faster than housing costs, mortgage rates normalize, and new housing supply gradually relieves pressure on prices. None of those forces require a housing crash. Instead, they allow affordability to improve over time as wages catch up and ownership costs stabilize. In the meantime, the practical adjustment for many households is simply renting longer before buying—a shift that quietly reinforces long-term rental demand in growing regions like eastern Washington.

Washington still has a structural housing shortage. The Department of Commerce has said the state needs 1.1 million additional homes over 20 years, and more than half are needed at lower affordability tiers. That is not the profile of a market where the durable solution is a steep reset in housing costs. It is the profile of a market where supply remains constrained, especially in the kinds of units normal working households can afford.

You can see that tension in pricing. Despite years of higher financing costs, home values in eastern Washington have not collapsed. Zillow’s February 2026 data shows Spokane–Spokane Valley home values up slightly year over year and Kennewick–Richland only marginally down. Redfin shows Spokane home prices essentially flat year over year in February 2026, while Kennewick posted gains. In other words, high rates have pressured affordability, but they have not produced the kind of broad price crash many buyers hoped for.

One reason is the mortgage rate lock-in effect. Existing owners with low-rate mortgages have been reluctant to sell and give up cheap debt. That has restrained resale inventory and helped support prices. New research highlighted by Harvard’s Joint Center for Housing Studies found that rate lock helps explain why home prices did not fall as much as many models predicted when rates rose; Freddie Mac has also estimated the lock-in effect remained meaningful into 2024. That means even in a higher-rate world, supply does not automatically come rushing back.

That matters for eastern Washington specifically. In Spokane, the market has added enough multifamily supply to lift vacancy and stabilize rents in the near term. A 2025 Spokane housing report said the county reached rental parity in late 2024, with vacancy rising to 5.8% and projected above 8% as more units were delivered. But the same report also says Spokane County needs 70,000 to 113,000 more homes over the next 19 years. So the short-run picture can look softer for landlords while the long-run picture still points to undersupply. Those two facts are not contradictory. They are what a market looks like when it is trying to catch up from a deep deficit.

The Tri-Cities tell a similar story. CoStar data for Kennewick–Richland showed 8.1% vacancy in late 2025, but vacancy in the more affordable 1- and 2-star segment was only 4.1%, and the report notes that established properties are typically closer to 4% to 5% vacancy. It also notes that construction activity has dropped off sharply, with only a handful of units under construction as of Q4 2025. That is important: today’s softer conditions are concentrated in newly delivered, more expensive product. The more affordable stock remains tighter, and the development pipeline is thinning. That is not the setup for rental demand disappearing. It is the setup for demand reasserting itself once new supply gets absorbed.

Wage reset for the middle class

The middle class is where this pressure becomes most visible. I would not state as a clean fact that middle-class wages have seen the lowest increase over the last 10 years, because the data are more mixed than that. Over the long run, Pew finds upper-income households have materially outpaced middle-income households in income growth, while lower-income households grew more slowly than the middle over the 1970–2020 period. More recently, EPI found that between 2019 and 2024, low-wage workers actually saw the strongest real wage gains, and the Census Bureau reported that between 2023 and 2024 income gains showed up more at the 90th percentile than at the 50th percentile. So the cleaner argument is not “the middle class had the worst wage growth over 10 years.” The cleaner argument is that the middle class is being squeezed between ownership costs that jumped faster than wages and a rental market that, while still cheaper than buying, is no longer cheap.

That squeeze shows up clearly in local incomes. Spokane County’s median household income is $78,582. Benton County’s is $89,874. Franklin County’s was $82,755 on the 2019–2023 series. Against those incomes, both rent and ownership consume meaningful shares of household budgets, but ownership takes the larger bite. For households that earn too much to qualify for major assistance yet not enough to comfortably absorb a step-up in payment, renting remains the only realistic option.

What does it mean for multifamily investors?

And that brings us to the investment implication: rental demand in eastern Washington does not need rents to soar in order to remain durable. It only needs the ownership hurdle to stay meaningfully above what a large share of households can afford. As long as buying requires a larger down payment, a materially higher monthly payment, and a willingness to leave behind the flexibility of renting, many households will continue to lease by necessity, not by preference. In Spokane, near-term vacancy has risen because supply finally arrived, but the region still needs far more housing over time. In the Tri-Cities, new deliveries temporarily lifted vacancy, but the more affordable tiers remain tighter and construction is slowing. In both places, the long-run support for rental demand remains intact.

The broader lesson is simple: the affordability problem in 2026 is not just that housing is expensive. It is that ownership has become disproportionately expensive relative to renting and relative to wages. Until incomes rise enough to close that gap, or housing supply expands enough over many years to materially change the equation, rental demand in markets like Spokane and the Tri-Cities is unlikely to disappear. It may shift by product type. It may moderate for new luxury units. But for attainable housing in growing eastern Washington markets, demand still has a long runway.

The Tamarack Take.

A view of affordability issues from a multi-family investor.

Housing affordability is one of the defining economic challenges facing communities across the country, including here in eastern Washington. As multifamily investors, we spend a great deal of time studying these dynamics—not because we can solve them ourselves, but because understanding them is essential to making responsible long-term investments.

It’s important to acknowledge a reality that can sometimes be misunderstood: property owners do not set rents in a vacuum. Rent levels ultimately reflect market demand and supply. If rents are priced above what the market will support, units simply sit vacant. If rents are priced well below market, the value of the property declines and the long-term viability of the investment weakens. In practice, rents settle where the market clears—at the point where residents are willing and able to lease a unit.

That doesn’t mean we are indifferent to affordability challenges. Quite the opposite. Healthy housing markets require balance—enough supply to meet demand and enough economic growth for households to keep pace with housing costs. As investors, our role is not to manipulate rents upward, but to operate properties responsibly, provide quality housing, and invest capital in communities where housing demand is strong and long-term fundamentals remain sound.

In markets like Spokane and the Tri-Cities, the reality today is that rental demand remains strong largely because homeownership has become more difficult to access for many households. Until the gap between renting and owning narrows—through income growth, additional housing supply, or improved financing conditions—many residents will continue to rely on rental housing.

Our goal at Tamarack is simple: to understand these market forces clearly, invest thoughtfully, and provide well-run housing that serves residents while delivering stable long-term value for investors.