OREGON - As, the state of Oregon, experiences a shortage of housing inventory, and more investors are turning to the rental market to offset the higher acquisition costs. These days, renting properties can be a better play than buying single-family homes because higher monthly rents can help offset higher prices. The lack of housing inventory will increase the demand for rental units in the state and reduce the risk of vacancies.
Cost of living in Portland
The cost of living in Portland, Oregon, is the same as in other large cities in the west. While it's not cheap, it's still affordable and offers excellent salary opportunities. The city has a median income that's higher than the national average. It's also a hotspot for industry, and many companies choose to set up their regional headquarters. The cost of living in Portland is rising, but new development is making the city more affordable.
While Portland's cost of living is higher than the national average, other factors should be considered. While Portland's housing costs are higher than national averages, other expenses like groceries and utilities are much lower. The city's moderate climate will help you save money on your electricity bill.
While Portland is near the ocean, mountains, and protected forests, the city lacks sufficient room for growth. Developers can tear down older buildings and replace them with skyscrapers, or they can create new suburban neighborhoods. These factors will all add to the cost of living in Portland in 2023.
Oregon's rent-to-income ratio (RTI) is expected to rise by 14.6% by 2023. That's significantly higher than the 9.9% cap that was in place in 2022. This sign that Oregon's housing market will likely remain a seller's market for the next several years. The rising number of renters will likely create a ripple effect in the rental market.
HUD's revised calculation methodology incorporates more local rental market inflation data. It also performs a recent mover adjustment for each area, considering the time lag between five-year ACS and the current rental market. These changes make FMRs the most accurate estimate of rents in each area by 2023.
While many of the factors that determine rent-to-income ratios are hard to predict, the federal government is committed to maintaining transparency in its calculation process. The agency maintains a website for interested parties and presents average measures of rent inflation.
Median home value to income ratio
Oregon's median home value to income ratio for 2023 is 93 percent, which is slightly higher than the national average. While the housing market in Oregon has experienced significant growth in recent years, the high mortgage rate is not helping homebuyers. The state economist, Josh Lehner, says that housing prices will continue to rise, making it difficult for many to afford a home.
The price-to-income ratio has increased by nearly double since the 1960s, and it's now more than three times what an average household earns. In 2017, the nationwide average was 3.6, which meant that a home required nearly 3.5 years' worth of household income. Since the mid-90s, the ratio has been out of balance, resulting in unstable housing markets. The latest data shows that the price-to-income ratio is out of balance in all but 16 of the country's largest metro areas.
The Midwest's price-to-income ratio is slightly lower than the national average, but it's still slightly higher than the average. In the midwest, for example, median home prices increased by 29% from 2000 to 2017, while the regional household ratio was only slightly lower. Compared to the Western and Southern regions, the Midwest has seen relatively low home price growth, meaning that homebuyers can afford median mortgage payments.
Rate of in-migration to Portland
The in-migration rate in Portland, Oregon, is expected to be about 61,500 people annually by 2023. However, the rate of in-migration will fluctuate from year to year. The rate of in-migration to Portland varies by occupation. The top 10 occupations by net in-migration include seven of Oregon's ten largest occupation groups. These occupations have a relatively high net in-migration rate and employ many people.
The city's rate of in-migration has fluctuated since the last census. It has grown at a slower rate than the statewide average. Yet, the growth rate in Portland's suburbs has outpaced that of the city. And according to the U.S. Census Bureau, the rate of in-migration in Portland is expected to decrease by a few thousand people from July 2020 to July 2021.
The growth of Oregon's population is heavily dependent on migration. The state's population increased by 10% between 2010 and 2019, and most of the growth was due to migration. Nearly three-quarters of this growth came from the Portland metro area.