The percentage of residents who can afford the monthly payment on the median home sold has declined throughout the metro area, as “rising interest rates have pushed ownership affordability to its worst point in recent decades,” writes Oregon state economist Josh Lehner in an update on homeownership affordability using recently released November home sales data. But there is good news on the horizon, Lehner advises.
“The combination of lower interest rates, rising incomes, and falling prices this year and next will bring overall affordability back to the historical range,” he writes. “Sales volumes and housing starts will revive along the way.”
In the Portland Metro:
- Seasonally adjusted prices are down about 4% based on the latest data
- Sales volumes are down 40%
- New listings are down 25%
- Inventory is up 95% over the past year. These are the impacts due to the steep drop in affordability which priced out many potential buyers
- Currently, 19% of the Portland area households are estimated to be able to afford the monthly payment on the median home sold. This is a decline of 131,000 households since the start of the year
In Bend:
- There has been a big increase in incomes and an upward skew in the distribution in Bend during the pandemic, meaning more local households can afford housing
- Currently, 14% of households can afford the monthly payment, a decrease from 23% at the start of the year
In Salem:
- Currently, 22% of local households could afford the median sold home last month, a decline from 38% at the start of the year
In Eugene:
- Currently, 20% of local households could afford the median sold home last month, a decline from 36% at the start of the year
In Medford:
- Currently,28% of local households could afford the median sold home last month, a decline from 38% at the start of the year
Visit OregonEconomicAnalysis.com for the full report.