Portland's Housing Affordability Problem

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As many of you have seen over the past year, the housing market in the Portland area has continued to increase. With rising home prices and mortgage rates, buying a house has become extremely difficult or not an option any longer for many people. The increased price for homes and mortgage rates have priced many people out of the housing market, especially younger generations. Unfortunately, I have fallen into this group of the younger generation that is currently not able to afford to purchase a first home. Even with a full time job working in the public sector, the current housing market has exceeded my budget, along with many others in a similar situation. 

Not only has the affordability of the housing market in Portland decreased and priced some out of the market, it has also forcing more people from getting housing and remain homeless. We all know that Portland and almost every large city in the country have been dealing with an increase in homelessness and the challenges of helping those who are currently homeless. While local governments attempt to reduce the number of people that are without housing, the availability of housing and prices hurt those efforts. 

To see how the affordability of housing has decreased, data gathered about the average price for a house in the Portland area shows a concerning sign. According to Realtor.com, the average price for a home in Portland in October of 2023 was $525,000. Compare that to November of 2020, which the average price was $484,000 (Realtor.com, 2023). In just three years the average price has risen almost 9% for home buyers. Not only have the price for homes increased, but interest rates have increased to levels we haven't seen for close to 20 years. Current rates for a 30 year mortgage are about 7.4% according to Freddie Mac. In November of 2020 the same 30 year mortgage rate was about 2.2% (Freddie Mac, 2023). Besides the 9% increase in price for a house, todays interest rates would cause someone to pay about $1,000 more per month. 

Seeing how much the cost of buying a home has gone up, it's no surprise that many struggle to afford a place to live. People's wages have not come close to keeping up with housing prices and has led many to cut spending, move to more affordable housing, or lose their housing. In an article posted by Willamette Week, data shows that the number of people in Multnomah county who are homeless rose 20% this year compared to last year (Willamette Week, 2023). This should be no surprise after seeing the current housing market and wages not increasing at the same rate as housing costs. 

Our local, state, and federal governments need to prioritize making housing more affordable for everyone. While we know homelessness is an issue across the nation, the unaffordable housing market has only further increased this issue. From creating more housing, lowering mortgage rates, simplifying building regulations, and changing zoning for more residential use, there are several policies Portland and other levels of government can implement. Please follow the link below to learn how the nonprofit Habitat for Humanity helps families find housing and work towards making housing more affordable. 

https://www.habitat.org/


Written by: Justin Harmon


References

Portland, OR 2023 housing market: Realtor.com®. Realtor.com (2023). https://www.realtor.com/realestateandhomes-search/Portland_OR/overview

Mortgage rates. Freddie Mac. (2023). https://www.freddiemac.com/pmms

Effinger, A. (2023, May 10). Homelessness rises 20% in Multnomah County, annual count shows. Willamette Week. https://www.wweek.com/news/city/2023/05/10/homelessness-rises-20-in-multnomah-county-annual-count-shows/#:~:text=The%20number%20who%20were%20unsheltered,through%20enhanced%20methods%20in%202022.

Image Source:

Fahey, A. (2023, September 25). Investor activity slides amid a more challenging housing market. Bizjournals.com. https://www.bizjournals.com/portland/news/2023/09/25/investor-activity-falls-housing-market.html

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