PORTLAND, Ore. (KOIN) — The Oregon housing market could be reaching a better balance as mortgage interest rates increase and sales begin to cool off, state economic analysts tweeted Thursday.
The Oregon Office of Economic Analysis, which provides forecasts of the state’s economy, revenue and population, posted on Twitter after reviewing the latest May 2022 report from the Regional Multiple Listing Service.
In comparing the first five months of 2022 to the same period in 2021, the report for the Portland metro area states that new listings have decreased 3.8%, and closed sales have decreased 2.8%. While year over year, the listings have gone down, new listings actually increased 4.6% from April 2022.
The average year-to-date sale price in the Portland metro area is up to $615,600. In the April RMLS Market Action Report, the year-to-date average sale price for the metro area topped $600,000 for the first time.
The Oregon Office of Economic Analysis says housing affordability now is worse than it was at the height of the housing bubble, given the ongoing price appreciation and higher interest rates.
Inventory in the Portland metro area increased to 1 month in May, which is higher than it’s been since September 2021. Inventory has remained relatively low since the early months of the pandemic.
Economists say inventory is rising in the state, although it appears the Portland market has held up stronger for longer. They expect the increasing inventory trends and cooling demand for homes will accelerate over the next couple of months.
They would expect to see home price appreciation start to slow, as the demand decreases, but so far, home prices have not changed much. The Oregon Office of Economic Analysis says longer-term home prices follow income growth and the state will need to see mortgage rates continue to rise to push home price growth noticeably slower than income.
In May, the RMLS report showed the part of the Portland metro area with the lowest average home price was in Central Vancouver at $402,500.