The conversation around the Portland metro area housing market has been dominated by interest rates, but the truth is deeper than that. Rates have shifted, prices have softened in some spots, and inventory has opened up—but the single most important factor shaping our market today is affordability. And affordability still hasn’t returned to levels where we can expect a truly robust market.
Mortgage Rates and the One-Year Trend
Over the last twelve months, we’ve seen mortgage rates hover in the mid-6% range. As of this summer, the average 30-year fixed rate sits around 6.5–6.8%. That’s down from the peaks above 7% we saw in late 2023, and the trend line is generally positive for buyers—rates are moderating. The big question I hear from clients is whether that means the market is about to “take off” again.
The short answer? No.
The Affordability Index:
According to the latest RMLS Market Action report, the Portland Metro affordability index is 87. That number matters because 100 is the benchmark at which a family earning the median household income can afford the median-priced home with a standard 20% down payment and a 30-year mortgage.
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Median income in 2025: $124,100
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Median home price in June 2025: $570,000
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Mortgage rate assumption: 6.8%
That math works out to a family being able to afford 87% of the monthly mortgage payment—not 100%. In other words, even with rates improving slightly, most households are still priced out.
And here’s the bottom line: people can’t buy what they can’t afford. Most buyers don’t make decisions based on total debt; they buy houses the way they buy cars—by looking at the monthly payment. Until the payment matches incomes in a sustainable way, demand will stay muted.
What This Means for Buyers and Sellers
For sellers: We’re not in a freefall market, but we’re also not in a hot one. Homes are selling, but they’re taking longer—inventory climbed to 3.7 months in July, and market time rose to 52 days. Pricing strategy and presentation are critical.
For buyers: While affordability is still stretched, moderating rates do create opportunities. Compared to a year ago, your buying power has inched up. And if you’re able to think long-term, the current environment offers less competition than we’re used to in Portland. That means more time to shop, more negotiating room, and the ability to structure an offer that works for your budget.
The positive news is that if rates continue on this trajectory—staying stable or inching down—we will see more buyers return to the market. But it won’t be a flood. It will be gradual. Portland’s housing market is unlikely to be “robust” in the near term because affordability simply hasn’t recovered.
What we should expect is a slow, steady uptick in buyer activity as payments become more manageable. That’s good news for homeowners looking to sell and for buyers willing to enter while competition is still relatively light.
The Portland housing market isn’t going back to the past. Affordability remains the gatekeeper, and until households can cover that monthly payment comfortably, demand will stay measured. But trends are pointing in the right direction—and that means opportunities exist for both buyers and sellers who understand today’s realities.
