Denver, Colorado continues to woo homebuyers as home prices rose by 10.20 percent as of June according to the Case-Shiller 20-City Home Price Index. The Mile-High City was the only city included in the index that posted double-digit year-over-year growth in June. San Francisco, California posted a 9.50 percent year-over-year gain in home prices and Dallas, Texas rounds out the top three cities posting highest year-over-year home price growth with a reading of 8.20 percent.
Summary: If you’re planning to buy a home in Oregon later on this year or next, consider the fact that some prices are expected to rise in the state. And since rates are still very low right now, it might be better to buy today rather than wait until later in 2020 or into 2021 when prices are expected to be higher.
Recently updated mortgage rate forecasts — along with a home price outlook for Oregon — suggest that home buyers could see higher costs ahead as prices are expected to rise later on in 2020 and into next year. However, rates are still expected to stay low, much like they are today. Collectively, they make a strong case for buying a home sooner rather than later.
Outlook for Oregon Home Prices Through Spring 2020
It’s no secret that homes are getting more expensive in Oregon. House values have risen steadily over the last couple of years, largely the results of a skewed supply-and-demand situation. Short supply and strong demand are boosting prices across the state.
But what does the future hold? What is the outlook for Oregon home prices and mortgage rates in 2020 and 2021? According to recent forecasts, home prices are expected to rise over the coming months, while mortgage rates are forecasted to stay low.
Let’s look at house values prices first. According to the real estate information company Zillow, the median home value for Oregon reached $369,200 as of April 2020. That was an increase of 3.0% over the same month a year earlier. Looking forward, their economists expect prices to rise by around 3.9% over the next year or so (ending in April 2021).
So while they expect home prices in Oregon to slow down a bit, they also anticipate a continued upward trend stretching later into 2020 and into early 2021.
This outlook should come as no surprise when you consider the current supply and demand situation. Housing markets across the state of Oregon are experiencing low levels of supply, relative to demand. In some of the hottest markets, like those in and around Portland, there is currently less than a two-month supply of homes. A six-month supply is considered to be a well-balanced market.
Mortgage Rate Forecasts from Two Sources
That’s the home price outlook for Oregon, stretching into early 2021. On the mortgage side, we have two recently updated forecasts that suggest rates will remain low over the coming months.
The first mortgage rate forecast comes from Fannie Mae, which expects mortgage rates in 2020 to average out at 3.7%.
The economists at the Mortgage Bankers Association (MBA) offered a similar prediction recently. They expect the average rate for a 30-year fixed home loan to average 3.9% for 2020.
Granted, these are just forecasts. They are the equivalent of an educated guess. So we shouldn’t get too wrapped up in the exact numbers being projected here. The general consensus is that rates are expected to dip slightly or remain the same between now and the end of the year. That’s the key takeaway.
Buying a House Now Versus Waiting
Rising house prices are arguably the biggest concern for potential homebuyers in Oregon. Some aspiring buyers are already grappling with affordability issues, following the significant price increases seen over the last couple of years.
Related: Buying your first home in Oregon
A continuation of this rising trend could further reduce affordability for some home buyers across state. So a case could be made for buying a home sooner rather than later.
Disclaimers: This article includes projections and outlooks for the Oregon real estate market through 2020 and 2021. Such predictions were provided by third parties not associated with our company. We have compiled them here as an educational service to our readers.
Have Questions About Mortgages in Oregon?
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.