It’s lower than Seattle, however you continue to want properly over six figures.
Portland, OR, is thought for its quirky vibes, lush city parks, and scrumptious Pacific Northwest delicacies. Along with being a singular and rewarding place to stay, Portland can be residence to a aggressive actual property market that’s seen many adjustments over the previous few years.
For a lot of, shopping for a house in Portland is a dream come true, however it’s additionally vital to know the way it will affect your funds. From down funds to month-to-month mortgage funds, there’s loads to grasp earlier than shopping for your first residence
So whether or not you already stay in The Metropolis of Roses or need to relocate to the realm, right here’s a breakdown of the earnings you’ll have to buy your first residence in Portland.
Take a look at our unique report for an in depth nationwide evaluation.
How a lot earnings do that you must purchase a starter residence in Portland?
The median sale value of a starter residence in Portland is $401,840. To be able to afford this, first-time homebuyers in Portland ought to make $130,715 per 12 months, up 6.0% from 2023. Nonetheless, the median earnings in Portland is $101,552, that means the everyday resident can’t afford a starter residence.
As anticipated, starter houses in Portland are extra reasonably priced than the common residence (all value brackets mixed; see methodology for particulars). To be able to afford any median-priced residence within the space, you’ll have to make $149,023 (as of October 2023).
Nationwide, you want an earnings of $75,849 to afford a typical starter residence, which prices a mean of $240,000. The typical U.S. family earns an estimated $84,072.
First-time homebuyers’ information to the Portland housing market
Portland has skilled a blended market over the previous few years. Home costs have solely risen by 1.3% since January 2021, however the metro noticed sharp rises and drops throughout and following the pandemic.
The pandemic-driven housing migration increase affected Portland much like many different coastal metros; extra folks regarded to depart than keep, with consumers looking for solar and affordability. Portland truly misplaced 3.3% of its inhabitants from 2020-2023, a dramatic shift following practically a decade of sustained progress. This alteration, together with excessive mortgage charges, helped drop home costs by 21% from Could 2022 to January 2023, from a excessive of $580,000 to $456,000. One other value spike and drop adopted quickly after earlier than leveling out in early 2024.
Importantly, Oregon additionally has the nation’s highest charge of persistent homelessness. The difficulty is particularly extreme in Portland, with the unhoused inhabitants growing 65% from 2015-2023.
There’s loads to like about Rose Metropolis, although. If you happen to’re trying to transfer to Portland, town is residence to many well-known and eclectic facilities and sights all through its numerous neighborhoods. Forest Park, Powell’s Books, and the Hoyt Arboretum are among the most well-known, providing pure magnificence and leisure for folks of all ages. Portland additionally affords 400 miles of bikeways, breathtaking surroundings, and is inside a number of hours from the coast and Columbia River Gorge.
Some in style neighborhoods in Portland embrace the Pearl District, Hawthorne, and Buckman.
What does a typical down fee appear like for a starter residence in Portland?
Listed here are some frequent down fee quantities for a typical $401,840 starter residence in Portland:
Down fee share | Down fee quantity |
3% down fee | $12,055 |
3.5% down fee | $14,064 |
5% down fee | $20,092 |
10% down fee | $40,184 |
15% down fee | $60,276 |
20% down fee | $80,368 |
Down funds can vary from 0% to 100% of the entire home value, relying in your funds, mortgage kind, and long-term priorities. Whereas specialists have traditionally really helpful budgeting for a 20% down fee, the growing price of houses and continued sluggish wage will increase has led to a 15% down fee turning into extra frequent.
Some mortgage varieties permit for decrease down fee quantities. For instance, a Federal Housing Administration (FHA) mortgage requires simply 3.5% down, whereas the bottom attainable down fee for a typical mortgage is 3%. These quantities usually rely in your credit score scores, so consumers with greater credit score scores could qualify for decrease down funds.
What’s the typical mortgage fee for a starter residence in Portland?
The everyday month-to-month mortgage fee for a starter residence in Portland is $3,268. This assumes you place 3.5% down and have round a 7% rate of interest.
If this fee sounds too excessive, you could possibly contemplate renting an house in Portland. The typical hire value is $1,802, probably making it a greater possibility whilst you save for a down fee on a home. You too can use an affordability calculator to see what you may afford based mostly in your earnings and down fee.
What do you have to do subsequent?
If you happen to’re available in the market on your first residence in Portland, it’s vital to grasp how a lot home you may afford. Take your annual earnings, credit score rating, the present mortgage charges, and native market developments to decide that works finest for you.
From there, a Portland agent might help you navigate all the residence shopping for course of and supply worthwhile native experience. To be taught extra about the best way to purchase a house, take a look at Redfin’s First-Time Homebuyer’s Information.
Methodology
Redfin divides all U.S. properties into 5 buckets based mostly on Redfin Estimates of houses’ market values. There are three equal-sized tiers, in addition to tiers for the underside 5% and high 5% of the market. Redfin defines “starter houses” as houses whose sale value fell into the Fifth-Thirty fifth percentile of the Redfin Estimate tier.
We calculated the annual earnings wanted to afford a starter residence by assuming a purchaser spends not more than 30% of their earnings on housing funds. Housing funds are calculated assuming the customer made a 3.5% down fee and likewise take a month’s median sale value and common mortgage-interest charge under consideration.
The nationwide earnings information is adjusted for inflation utilizing the Client Value Index. 2024 earnings is estimated based mostly on projections from the U.S. Census Bureau’s (ACS) 2022 median family earnings utilizing the 12-month transferring common nominal wage progress charge. The speed was compiled from the Present Inhabitants Survey and reported by the Federal Reserve Financial institution of Atlanta.
We assume housing funds embrace the mortgage principal, curiosity, property taxes, householders insurance coverage, and mortgage insurance coverage (when relevant).
All information sourced February 2024 except in any other case acknowledged.