Many in the Portland area have been priced out of the housing market

This report from the Oregon Office of Economic Analysis said nearly 168,000 households in the Portland area have been priced out of the housing market this year.

“30-year mortgage rates have risen from around 3% at the end of 2021 to just over 6% in recent days,” the report said. “When combined with ongoing price appreciation, this means the cost of a mortgage payment has increased 40-50% in just a handful of months.”

The report said these changes to homeownership affordability mean less demand and a higher inventory of homes for sale.

Faced with rising mortgage rates and a competitive homebuying market, many realtors indicate that the market has cooled down a bit over the last year. Now rising interest rates are adding to an already challenging situation. It is very likely that With more buyers being priced out, the demand for rentals will increase — as will rent hikes.

“Whether these rental price increases ultimately result in reversing the increase in household formation during the pandemic is still unknown,” Lehner said.