With Mortgage Rates Rising, Four in Five Portlanders Can’t Afford a Home

Higher rates and stubbornly high prices are a deadly combination.

It used to be high prices that made Portland housing unaffordable.

Now, it’s high prices and rising interest rates.

Until recently, a 30-year mortgage (around 3%) was the best deal in town after a Costco rotisserie chicken ($4.99). What a difference six months make. To cool the economy and tame inflation, the Federal Reserve has been raising rates. As expected, mortgage rates have followed, rising to around 6% for 30-year money.

Combined with ongoing price appreciation, mortgage payments have risen by almost 50% in just a few months, says Josh Lehner, an Oregon state economist.

Lehner estimates that 168,000 Portland area households have been priced out of the market. Only one in five can afford to buy a home here, down from an already-terrible one in three.

Less demand will likely slow the rampant price appreciation that took hold during the pandemic, but without more supply, Portland is likely to remain unaffordable, he says.

“Longer-term, we know housing demand will be solid given income growth and demographics,” Lehner wrote in his blog on June 21. “Oregon needs to see continued gains in new construction.”

More bad news: A lawsuit filed on June 12, says Costco intentionally breeds its chicken to be too large to stand on their own and that they often die of hunger or injury. After similar allegations last year, Costco said it was committed to the “highest standards” of animal welfare. Might be time to move to the Midwest and become a vegan.