Portland Housing Affordability 6-16-2022

Portland's housing affordability update for 6-16-2022:

As of June 16, 2022, the average 30-year fixed mortgage rate in the US climbed again to 5.23% from 2.93% last year. The move reported from last Thursday to yesterday is the fifth largest weekly increase over the past 51 years, and it was the second highest increase in percentage terms!

Interest rates are extremely volatile right now, and this latest spike has buyers and sellers wondering what effect this might have on Portland's housing market. Combining the rapid increase in borrowing money to buy a house with a spike in the average sales price in Portland for single family houses leads to the question - Will the rate of price appreciation slow down?

One thing is certain, wildly fluctuating interest rates make it critical to have an up-to-date pre-approval letter. If you are buying, check with your lender to be sure you still qualify for a loan in the price range you are looking in. If you are a seller, be sure a buyer's pre-approval letter is current, before accepting an offer. Above all, work with a broker that communicates with the lender regularly, to ensure there are no surprises. 

The calculation of the reduction in purchasing power shown above assumes a 5% down payment, uses the average 30-year fixed rate mortgage rates reported by Freddie Mac for the weeks shown, and uses the average single-family sales prices as reported by the Regional Multiple Listing Service (Portland, OR area MLS).  No taxes or insurance figures are included.  The change in purchasing power is a scenario showing the change in purchase price given that the monthly payment in the previous time period would be the same monthly  payment in the latter, with all else being held equal.  The figures used are for illustration purposes only to convey to readers the impact changing interest rates and real estate prices have had on buyers and sellers.  We are not mortgage lenders; this is not an offer to lend money.  Please contact your mortgage lender to obtain quotes and to discuss mortgage loan programs that might be a fit for your circumstances.