Mortgage rates and home prices in Oregon have changed significantly over the last couple of years. This is particularly evident in Portland, which has seen a big rise in house values. As a result of these trends, the cost of buying a home in Portland is higher now than it was last year.
The Cost of Buying a Home in Portland: 2017
Here’s an updated look at the local real estate market, and how much it costs to buy a house in Portland in 2017. Let’s start by looking at recent home price trends.
According to the real estate data company Zillow, the median home price in Portland, Oregon was around $414,000 in March 2017. That marked an increase of 11% from the same time a year earlier. This is the primary reason why the cost of buying a home in Portland has gone up — houses are more expensive today than ever before.
Home prices across the metro area are expected to continue rising through the end of 2017, and probably into 2018 as well. But economists are predicting some normalization, in terms of year-over-year appreciation. So we probably won’t see any more double-digit annual growth in Portland house values.
The bottom line here is that the cost of buying a home in Portland has risen significantly over the last couple of years. And it will probably rise further through the end of 2017 and into 2018. So a strong case could be made for buying a house sooner rather than later.
A Look at Closing Costs
The home price is just one of the costs associated with buying a home in Portland. Buyers usually encounter a variety of fees and charges along the way, as well. These are collectively referred to as closing costs.
Generally speaking, the total closing costs for home buyers tend to range between 2% and 5% of the purchase price. But they can fall outside of this range as well. It varies.
In 2016, Bankrate.com conducted a state-by-state analysis to determine how much buyers were paying, on average, in both mortgage lender and third-party fees. Here’s what they determined for Oregon:
- Mortgage origination, underwriting and processing fees: $1,059
- Third-party fees (like home appraisal, credit reports, etc.): $1,175
- Total closing costs for home buyer: $2,234
For this analysis, Bankrate.com solicited cost estimates for a $200,000 mortgage loan with a 20% down payment, and then averaged them.
Granted, these are just averages based on a generic loan scenario. Your closing costs could vary based on a variety of factors. Please contact us if you’d like to receive a more accurate estimate of your closing costs, based on your specific situation.
The Down Payment Expense
The down payment is another important cost when buying a home in Portland. And it has to be paid up front, when you close on the home.
The average down payment in the Portland area is between 10% and 14% (depending on who you ask). But that doesn’t mean you’re required to put down that much. Different mortgage programs have difference minimum investments. Your down payment might range from 0% to 20%, depending on your loan type and other variables.
Here’s an overview of minimum down payments for popular mortgage programs:
- VA home loans offer 100% financing in most cases, for no down payment.
- FHA loans allow borrowers to put down as little as 3.5% of the purchase price.
- Conventional mortgage loans offer 3% to 5% down payments, on the low end.
- USDA / rural loans offer 100% financing for 0% down.
Down payments are a key cost of buying a home in Portland, but the money doesn’t necessarily have to come from you. A lot of mortgage programs, including both FHA and conventional, allow for down gifts from family members, close friends, and other approved sources.
Disclaimer: This article examines the current cost of buying a house in Portland, Oregon, in 2017. It uses averages for current home prices, closing costs, and down payments. Your home-buying expenses could vary due to a number of factors.