In Portland, Oregon, a recent advisory might make prospective homebuyers in Oregon take a pause. A fresh analysis conducted by Bankrate's financial experts reveals that owning a home in Oregon, as of 2024, is no small financial feat, requiring a salary well into the six-figure range. This trend isn't isolated to Oregon alone; it's a scenario playing out across nearly half of the United States. According to the report, Oregon is positioned as the 13th state in terms of the highest income needed to afford a home at the median price point, which, on a national level, averages around $402,343.
The typical American needs to earn $110,871 annually to afford a home, but in Oregon, this figure escalates to an impressive $120,000. Specifically, for Oregonians eyeing homes priced at $482,800, the average monthly mortgage payment would be $3,013.
This data stems from an analysis conducted in January 2024, examining sale prices, tax implications, and insurance costs. A comparison with figures from 2020 indicates a staggering near-50% increase in the income required for homeownership in half of the states, including the District of Columbia.
Back in 2020, an Oregon resident needed an income of $88,334 to afford a median-priced home. This requirement has since surged by approximately 46.2%, a stark contrast to the stagnation in wage growth. This increase in home prices, coupled with rising mortgage rates and a persistent shortage of available homes in the U.S., complicates the purchasing process, especially for first-time buyers. The reluctance of homeowners to sell and face higher mortgage payments on a new property has contributed to this shortage.
Jeff Ostrowski, a seasoned housing market analyst, points out that the home supply has been limited by several factors, including slow construction rates and homeowners choosing to stay put, despite a growing demand for housing. As a result, the competition among buyers has intensified.
California tops the list of states requiring the highest income for home purchases, with an average income of $197,057 needed for a home valued at $739,200, translating to a monthly mortgage of $4,598. Hawaii and the District of Columbia follow in terms of expense.
Ostrowski comments on the near-record high home values, suggesting that buyers have little choice but to meet these high prices if they wish to purchase. The challenge, he notes, lies in finding homes within one's budget, particularly as the home price escalates, making down payments and monthly payments more difficult to manage. Conversely, Mississippi is noted as the most affordable state for homebuyers, where an income of $63,043 is sufficient for purchasing a home priced at $228,500, with a monthly mortgage of $1,471.
Despite these daunting costs, Ostrowski advises prospective buyers not to be deterred by current market conditions. He emphasizes the long-term financial stability homeownership can offer, suggesting that those in a position to buy should consider doing so without waiting for the market to turn more buyer-friendly.
