Residents need this income to afford a home in Portland, Oregon

The median selling price of Portland homes last October was $540,000, according to Redfin

PORTLAND, Ore. (KOIN) — Monthly mortgage payments for the average U.S. home rose about 70% from February 2020 to October 2022, according to real estate broker Redfin.

Redfin considers a monthly mortgage payment to be “affordable” if it does not exceed more than 30% of the buyer’s income.

In the US, Redfin says the average home buyer needed to make $107,281 a year to pay their mortgage in October 2022. That’s a 45.6% increase from last October, when the figure was $73,668.

For Portland homebuyers, in particular, $145,306 in total income was needed to afford a mortgage in October 2022. In October 2021 alone, they would have needed $100,146.

This growth has been partly attributed to two factors: high mortgage rates and the ever-increasing cost of homes. Moreover, during this same period, Redfin reports that the American hourly wage has only increased by 5%.

Minimal wage gains coupled with inflation pose challenges for people in the market for a new home.

“High rates are forcing buyers to rethink their priorities because many of them can no longer afford the home they want in the location they want,” said Chelsea Traylor, a Washington-based Redfin agent. , DC. “If you had a budget of $900,000 a few months ago, the rate hike means it’s now around $700,000 – and sellers aren’t lowering their prices enough to make up for the change. So shoppers are looking further out of town in more affordable areas or waiting for prices and/or rates to drop before moving.

The median sale price for Portland homes last October was $540,000, according to Redfin. In October 2021, it was a little lower at $515,000.

Home buyers in nearby towns are also experiencing a price spike. In Seattle, someone needs to earn $205,312 a year to pay monthly mortgage payments. In October 2021, they should have earned $140,982.

Oregon and Washington are both among the most expensive states to buy a home in, but there could be some luck as mortgage rates start to drop.

Many real estate agents also ask homebuyers to consider the big picture.

“I encourage buyers to think long term,” Traylor said. “Prices are unlikely to fall drastically in the long term, so buying a home now – if you can afford the monthly payment – will still help you build wealth over time, especially if you plan to live there for several years. Although the rates are high, another advantage of buying now is the lack of competition and the ability to negotiate with sellers.”