Posted by: Josh Lehner | December 9, 2022

Oregon Homeownership Affordability, November 2022

Just a few charts for your Friday. Affordability is important because housing is a big part of household budgets, can impact migration trends, and construction activity that is part of broader economic growth. The runup in home prices earlier in the pandemic are now reversing as rising interest rates have pushed ownership affordability to its worst point in recent decades. November home sales data is now available, and more importantly I have updated regional household incomes across the distribution so we can get a better, more updated look at relative affordability. All of these charts will be similar, but based on local incomes, local property taxes, and local home sales prices they do differ slightly.

In terms of the direct economic impacts, bad affordabilty hurts household bugets, and reduces volumes of activity when it comes to new housing starts, and existing home sales. Improvements will come. The combination of lower interest rates, rising incomes, and falling prices this year and next will bring overall affordablity back to the historical range. Sales volumes and housing starts will revive along the way. See our most recent forecast for more on this (PDF pg 19).

First, let’s take a look at Oregon’s biggest market, the Portland metro region. Seasonally-adjusted prices are down about 4 percent based on the latest data. Sales volumes are down 40 percent, new listings down 25 percent, and inventory is up 95 percent over the past year. These are the impacts due to the steep drop in affordability which priced out many potential buyers. Today, 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.

Second, let’s go across the mountains over to Bend. Overall the Bend market really struggles with affordability. I’ll have more on this in the regional income update that is in the works, but Bend’s affordability looks better than previously estimated based on the updated incomes. 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 percent of households could afford the monthly payment, a decrease from 23 percent at the start of the year.

Third, we’re heading back to the valley and looking at the Salem market. Currently 22 percent of local households could afford the median sold home last month, a decline from 38 percent at the start of the year.

Fourth, let’s head south to the Eugene market (Lane County). Currently 20 percent of local households could afford the median sold home last month, a decline from 36 percent at the start of the year.

Fifth, we are heading further south down to the Rogue Valley and looking at Medford (Jackson County). Currently, 28 percent of local households could afford the median sold home last month, a decline from 38 percent at the start of the year. While the drop in interest rates is pricing households back into the market, November prices in the Medford market fell noticeably, driving the increase you can see in the chart last month.

As mentioned the other day, stay tuned for more on regional income trends over time. I have now finished the data work but need to pull everything together in one place.


  1. Does the Portland numbers include Clark Cty? I hope their prices increase drastically so they will stop pulling homeowners across the river.

    • Don’t think so, but for apartments Clark county will sell more this year. MultCo will be down like 50% in sales.

  2. Interesting (esp since you have numbers). I’m going to say the 33%+/- drop in those that can afford housing is due to this spring’s desperation to buy a house at any price. Sold my neighbor’s house and if he would’ve waited 2 months, it wouldn’t have sold.

    Like in commercial, the residential sales volume is going to drop. Since I get asked on apartments, does that mean a commensurate drop in pricing – No. If it’s like 2009, prices didn’t drop UNLESS a bank forced a sale.

    And there is plenty of money out there. That’s prob 75% why the stock market is still climbing.

  3. How do you figure we will see new home starts when there is not any more land to build on in the big cities and those leaders refuse to grow them? I see churches and golf courses being converted to homes in Eugene because there is nothing else.

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