Washington Is Failing in Affordability and Homebuilding: Can Gov. Ferguson Overcome the Supply Crunch?

Washington’s housing market remains one of the least affordable in the nation.

The Realtor.com® State-by-State Housing Report Card gave the Evergreen State a C-, underscoring deep affordability challenges and persistent underbuilding. The report—part of the Let America Build campaign—grades every state on how well it balances current housing costs with new construction.

President Donald Trump recently put pressure on homebuilders to increase construction nationwide, given the issues with construction in the country. In a post on his Truth Social platform in early October, he accused major builders of hoarding lots to prop up prices—likening them to OPEC, which restricts oil output to maintain high prices.

“They’re my friends ... but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote. He urged Fannie Mae and Freddie Mac to intervene and “get Big Homebuilders going” to “restore the American Dream.” 

For Washington, the verdict is clear: the state’s booming economy has far outpaced its ability to build enough homes.

Washington’s “C-” grade explained

Realtor.com’s analysis gave Washington a total score of 44.7, placing it among the lowest-ranked states nationwide. The state’s median listing price reached $636,445 in 2024, while the median household income was $93,297. The Realtors Affordability Score came in at just 0.48, showing that fewer than half of listings are within reach for median-income households.

In terms of building activity, Washington accounted for 2.6% of national housing permits in 2024, compared with its 2.3% share of the U.S. population. That results in a permit-to-population ratio of 0.96, signaling that builders are barely keeping up with demand.

The new construction premium—the difference between new and existing home prices—was 18.3%, showing that new homes remain significantly more expensive than older inventory.

The West’s affordability crisis

Nationwide, new construction is starting to help ease affordability pressures, but the West continues to struggle. The Realtor.com New Construction Insights report found that the median new-home price held steady at $450,797, while resale prices climbed 2.4%, narrowing the national new construction premium to 7.8%—the lowest in the dataset’s history.

Yet in the West, affordability remains elusive. Realtor.com data shows that the region has seen the steepest drop in the share of new-construction listings year over year, even as the total number of homes under construction has increased. High land costs, local regulations, and material expenses continue to hamper builders.

Seattle, Spokane, and Tacoma illustrate the problem: even as builders expand capacity, population growth and high demand for urban living continue to drive up prices.

But again, the pinch is being felt all over.

“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors®.

"NAR research shows that the U.S. has faced a persistent housing shortage for more than a decade, driving up prices and limiting options for buyers. Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”

Governor Ferguson’s housing reform plan

Since taking office in January 2025, Governor Bob Ferguson has made housing construction a key priority. One of his first major actions was signing Substitute House Bill 1353, sponsored by Rep. Alex Ramel (D-Bellingham), which is designed to accelerate the development of accessory dwelling units (ADUs) across Washington.

The law establishes a voluntary self-certification program allowing registered architects to confirm that detached ADU plans comply with building codes in cities governed by the Growth Management Act (GMA). The measure aims to reduce permitting delays, lower costs, and ease workloads for local planning departments.

“This idea is already working in other states to cut permitting times and bring down costs,” Rep. Ramel said. “It empowers architects to take responsibility for compliance while preserving safeguards through audits and inspections.”

Participating cities are required to audit at least 20% of self-certified applications each year. The program applies only to detached ADUs and takes effect 90 days after the close of the legislative session.

Washington lawmakers have also advanced a series of housing measures focused on boosting construction and lowering costs statewide, pending the governor’s approval. These bills address parking reform, transit-oriented development, landmark preservation rules, lot splitting, and accountability in housing production. The most significant of these measures is HB 1096, which allows property owners to subdivide and sell portions of their lots for new home construction.

This article was produced with editorial input from Dina Sartore-Bodo and Gabriella Iannetta.