Thanks to low mortgage rates, homes in most metros are actually more affordable today than they were in 1990.
Portland is a rare exception.
The Portland area’s rapid run-up in home prices has made it one of only three cities where homes were less affordable in 2016 than in 1990, according to a new report from the real estate website Trulia.
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Denver and Miami have also become less affordable over that period, according to the report, both by a greater margin than the Rose City.
Portland remains narrowly affordable overall, according to the report’s metrics, which measure whether a median-income household could afford a median-priced home.
Seattle and San Francisco, by comparison, rated as unaffordable in both 1990 and 2016, but they grew more affordable in recent years as rising home prices were offset by low mortgage rates.
Portland metro prices have climbed 57% since 1990 when adjusted for inflation, Trulia estimates. That’s one of the largest increases in the nation.
Mortgage rates have declined fairly steadily since their peak of 16.6% in the early 1980s, and affordability nationwide has climbed correspondingly. In recent years, the average rate has fallen below 4%.
But rates have climbed nearly half a percentage point in early 2018. The average 30-year rate hit 4.46% last week, according to government-backed mortgage buyer Freddie Mac.
Affordability could worsen nationwide if mortgage rates continue to climb. That could curb sales or tamp down on the growth of home prices.
In the Portland metro, the median price for a home sold in January was $390,000, an up 11.4% from a year earlier.
Tribune Content Agency