Why the 2021 Housing Market Isn’t Coming Back—And That’s Okay
By David Caldwell, Principal Broker at Hillshire Realty Group
In 2021, the Portland housing market moved like a rocket. Buyers flooded in, homes sold in days, and bidding wars became the norm. From a transactional standpoint, it was one of the busiest and most competitive markets I’ve ever worked in.
But it wasn’t just enthusiasm that fueled the fire. It was affordability.
At the start of 2021, the average 30-year fixed mortgage rate was hovering around 2.65%. Pair that with the median home price in the Portland metro area at approximately $509,000, and you had a moment in time where monthly housing costs—relative to income—were unusually accessible.
Fast forward to today, and the picture is dramatically different.
As of mid-2025, mortgage rates are flirting with 7%, and the median home price in the Portland metro area during May 2025 was $569,500 and the average sales price at $610,500. That combination has created a serious affordability wall. The gap between what buyers can afford and what homes cost has grown too wide for the market to move with any real momentum.
The result? Slower sales. Longer days on market. Rising inventory. In May 2025 alone, Portland metro listings climbed over 6,000 active units—while pending sales lagged behind at 2,299. We’re seeing more homes come to market, but fewer are going under contract.
This isn’t a seasonal lull. It’s structural.
Affordability is no longer a challenge—it’s the challenge. And unless we see either a substantial drop in home prices or a dramatic change in mortgage rates (neither of which are likely in the short term), we simply can’t expect to return to the hyperactivity of 2021.
And maybe we shouldn’t.
That market, as thrilling as it was, wasn’t healthy or sustainable. Buyers waived inspections. Sellers fielded 15 offers overnight. Prices outpaced wages at breakneck speed. It was momentum built on borrowed time and borrowed money.
Today’s market is slower, yes—but also more grounded. Buyers are more cautious. Sellers are adjusting. And while change is uncomfortable, it’s not bad. It’s just different.
We don’t need to chase the past. The 2021 housing market was a moment in history, not a blueprint for the future. As professionals, homeowners, and investors, we’re better served by understanding where we are—and making decisions rooted in that reality.
The new market requires patience, strategy, and discipline. But it also offers something the 2021 market didn’t: the time to think clearly.
And in real estate, clear thinking is worth more than speed.
The National Association of REALTORS® (NAR) Housing Affordability Index measures whether a typical family can afford to buy a median-priced home, based on the median income and prevailing mortgage interest rates. It essentially determines if a family earning the median income has enough income to qualify for a mortgage on a median-priced home. An index of 100 means the median income family can just afford the median-priced home, while a value above 100 indicates greater affordability
