A new report from the State of Oregon Employment Department sheds some light on the dilemma many Oregonians are finding themselves in.
The cost of homes is going up—no big surprise. Even so, they may still be affordable. The affordability index is based on three elements: 1) Average wages, 2) the cost of borrowing, and 3) housing costs.
The good news – average wages are slowly increasing in our region. This slow increase will help offset the raising house costs. In some of the more urban areas, wages are rising faster, but so are the house costs. The wages in Hood River are more than $1,100 lower than the state average. The average monthly mortgage sucked up nearly half of the wages (52 percent) making Hood River one of the least affordable housing locations in the state, followed closely by Bend (at 40%).
More good news – the cost of borrowing is really low. These low rates help slow and offset the rising house cost trends and make housing more affordable. Compared to the last expansion period, interest rates are two percentage points lower. Even 30-year fixed rates below 4 percent are available! 
But still, housing may be unobtainable. Competition for properties in our region has been tightening up as the inventory of available properties dip. The number of properties being offered is nearly 20 percent lower than this time in 2018. In some locations, like Portland, properties may seem to just fly off the market with only 9 median days before it is sold.
These three elements help the housing market look pretty good...kinda. Getting something affordable, regardless of what measure is being used, is certainly a goal. There are different definitions for affordable, depending on your situation, location, down payment, etc. Some say that your average mortgage should be no more than around 30 percent of your average income, others compare cost per foot costs, or have different percentages depending on the down payment.
But we may also have a different problem....Getting something, if there is nothing to choose from, is a very different problem. We have heard several stories that the lack of choice has caused recent ‘imports’ to leave because they just can’t find what they want or need. Either way, one thing is for sure—if there simply isn’t any housing available, ‘affordable’ may not matter.
1 Housing Affordability in Oregon (https://bit.ly/2lOeyrw)
2 July 2019 Market Action Report
3 Hot Market with Steady Prices (https://www.pdxlisted.com/hot-market-with-steady-prices-june-2016-portland-real-estate-market/)
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