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Are you thinking of buying a home in Portland, Oregon in 2022? Do you have questions about the real estate market, mortgage loans, or other aspects of the home buying process?
You’ve come to the right place. Below, you’ll find an update on current market conditions, home prices, loan limits, and other topics of interest to Portland home buyers.
If you’re thinking of buying a home in Portland in 2022, we have compiled some of the most common home-buying questions, and have done our best to answer them thoroughly. We hope this update helps you make an informed decision when buying a home in Portland.
The Portland, Oregon housing market is still competitive right now in 2022. And Portland’s real estate market continues to be hot right now, and is expected to be in the coming months.
There is a high level of demand for housing in the area, but limited supply. This has led to significant home-price gains over the past couple of years (See question #2 below for more about price trends.)
Portland’s robust tech industry attracts young and upwardly mobile residents from elsewhere in the state, and from across the country. This, among other things, has increased demand for housing.
The local real estate market has been healthy over recent months, and prices in the city are still much higher than the national average as a result. As of January 2022, the average price for a home in Portland is $559,883, compared to the national average of $320,662. And with only 1.1-months’ worth of inventory, the supply is still not keeping up with demand.
Bottom line: If you’re planning to buy a home in Portland in 2022, start preparing now. Speak to a mortgage lender (like us!) about your financing needs. Get pre-approved for a home loan. Start researching the market and the neighborhoods where you might want to live. Get a feel for home prices in your desired area. This preparation will pay off later on, when it comes time to make an offer and negotiate with the seller.
Yes, home prices in Portland, Oregon are continuing to rise in 2022. According to the most recent data from Zillow, home values in Portland have increased 12.4% over the past year, and they are expected to increase at a relatively similar pace over the next 12 months.
Bottom line: When buying a home in Portland, it’s important to understand the impact of appreciation and depreciation. Buyers who purchase sooner rather than later could have more buying power, and more homes to choose from within their price range. You never want to rush into a major financial decision like home buying. But you do need to consider the potential cost of waiting.
The current (2022) conforming loan limit for a single-family home in Multnomah County is $647,200. Anything above that is considered a “jumbo” mortgage. The FHA limit for a single-family home in the county is $598,000.
For VA loans, the loan limit has been eliminated, which means qualified borrowers can still benefit from no money down regardless of what the price of the home is that they are buying. However, loan limits may still apply to those currently with more than one VA loan or who have defaulted on a VA loan in the past.
The Federal Housing Finance Agency typically announces the next year’s conforming loan limits in November. Generally speaking, loan limits are usually increased every year in response to rising home prices, though they don’t necessarily all have to increase. Some years they may remain the same, while others there may actually be a slight dip. But for the most part, increases in loan limits are typically seen.
Related: Portland home prices and FHA limits
Bottom line: If you need a mortgage loan to buy a home in Portland in 2022, you’ll encounter some kind of limit on the amount you can borrow. Homes that exceed these limits generally require jumbo mortgage loans, and you might have to make a larger down payment in order to qualify. This is why most home buyers in Portland stay within the limits for their particular mortgage program (VA, FHA or conventional).
When you apply for a mortgage loan, the lender will compare your recurring monthly debts to your monthly income. This is known as the debt-to-income ratio, or DTI. This ratio helps lenders ensure that you’re not taking on too much debt. So that’s one of the factors that will determine how much you can borrow.
As to how much you can comfortably afford, that’s something you must determine for yourself. Start by taking a good look at your current monthly expenses and income. Focus on your non-housing expenses, for starters.
Figure out how much you spend on non-housing costs like car payment, credit card bills, groceries and lifestyle expenses. Subtract that number from your net monthly income (or take-home pay), and then work down from there to determine a maximum mortgage payment. Be sure to account for savings and retirement contributions, as well as a financial emergency fund.
Many financial advisors recommend spending no more than 33% of monthly income on mortgage payments, but this is just a general rule. You’ll want to do the math to find out what works for you.
Related: Income to buy a home in Portland
Bottom line: Getting pre-approved for a mortgage loan is a great place to start. This will help you determine how much you can afford to buy in Portland, based on your loan amount. Pre-approval will help you narrow down your home search. It will also make you more competitive, as a home buyer. (Sellers will take your offer seriously if it’s supported with a pre-approval letter.) Please contact us if you’d like to get pre-approved for a loan.
The average rate for a 30-year fixed mortgage loan has been steadily increasing over the past year, according to Freddie Mac. The general consensus is that rates will stay low through the end of 2022, though they will inch up slightly. The long-range forecast suggests that the rate will hit anywhere from 3.7% to 4% by the end of the year.
If you have questions about mortgages in Portland or are ready to apply for one, call Sammamish Mortgage. We are a local, family-owned company based in Bellevue, Washington. We currently lend in all of Washington, Oregon, Idaho, and Colorado and have been offering a wide variety of mortgage programs and tools with flexible qualification criteria since 1992. Contact us to get the process started!
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.