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Summary: Conforming loan limits have increased in Portland, Oregon in 2021 as a result of higher home prices. But the limit is still much higher than the average home price in the city, leaving a lot of wiggle room for buyers.
Home prices in Portland, Oregon have been rising steadily for the last few years. As a result, federal housing officials raised the conforming and jumbo loan thresholds for the Portland metro area in 2021. Here’s an updated look at those revised limits, and how they relate to house prices in the city.
Definition: A conforming mortgage loan is one that meets the size restrictions (and other guidelines) used by Freddie Mac and Fannie Mae, the government-sponsored corporations that purchase mortgage loans from lenders. When a home loan exceeds these limits, it is referred to as a jumbo mortgage.
As of December 2020, the median home price for Portland, Oregon had risen to around $487,170. That’s based on data provided by the real estate information company Zillow. Other sources might report slightly different figures, though they’re all in the same ballpark.
In a real estate context, the median price is basically the midpoint for the market. Half of all homes are valued above the median, while the other half are valued below it. The statewide median home price was $385,520 in December. Portland is a comparatively higher priced real estate market due to the strong demand from buyers in the city.
So that’s an updated look at home prices. But what about loan limits? At the end of 2020, the Federal Housing Finance Agency announced they were raising the conforming loan limits for 2021. This was done in response to steady home-price appreciation that occurred nationwide during 2020.
These limits vary by county because they are based on house prices, which also vary from one area to the next. In the Portland metro area, the conforming loan limit for a single-family home was raised to $548,250 for 2021. Anything above that is considered a jumbo mortgage and might come with additional scrutiny.
So what does this mean for home buyers who are planning to buy a house in the Portland area? It means that slightly more than half of the homes for sale in the area fall below the conforming loan limit assigned to Multnomah County. So, in theory, buyers should have plenty of homes choose from without going above the jumbo mortgage threshold.
Note: It’s possible to borrow more than the conforming loan limit by using a “jumbo” mortgage. But the qualification and income requirements can be a bit more stringent, due to the higher amount of money being borrowed. As a result, most borrowers and home buyers in Portland tend to stay within the conforming loan range.
The reality, though, is that Portland’s real estate market is still experiencing a supply shortage. We have reported on this many times in the past, because it’s an important factor that’s driving the local real estate market.
As of this winter, inventory in Portland sits at around a 1.1-month supply. Five to six months is considered a normal or balanced real estate market. So things are still tight from an inventory standpoint.
Despite the supply shortage, the higher loan limits that were established for 2021 should still benefit buyers, at least when it comes to mortgage financing.
Sammamish Mortgage is a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, and Oregon. We have been in the business since 1992 and are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have any questions or are ready to apply for a home loan.
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