A new set of forecasts and outlooks suggest that home-buying costs in Oregon will likely rise as we move through the end of 2017 and into 2018.
The good news, for now, is that mortgage rates have been fairly stable. So now might be a good time to buy a house in the state of Oregon. Those who wait will likely encounter higher housing costs in the months ahead.
Mortgage Rates Stable But Expected to Rise
According to a recent housing forecast from Freddie Mac, the average rate for a 30-year fixed mortgage loan is expected to remain at or below 4% for the rest of 2017. (It was around 3.9% when this article was published, on August 22, 2017.)
In a recent statement, the company said:
“With mortgage rates expected to stay below 4% for the remainder of the year, home sales should reach 6.2 million units for 2017, a 3% increase over the 2016 days. However, home sales would be much higher if inventory was not so tight.”
This statement includes a couple of important forecasts for the Oregon housing market, both of which are relevant to home buyers.
- First, we have a prediction that rates will remain below 4% for the rest of 2017. Granted, this is just an educated guess. But it’s helpful to know that economists foresee continued stability in the short term.
- They also mentioned that housing inventory is tight right now. This is true for Oregon as well. The Portland metro area, in particular, currently has one of the most constrained real estate markets in the country. We have been seeing limited housing inventory in other parts of Oregon as well, to varying degrees.
According to Freddie Mac’s long-range forecast, they expect 30-year mortgage rates to average 4.4% in 2018. So they are predicting a gradual rise in rates next year. If this holds true, it means that Oregon home buyers who postpone their purchases until next year could encounter higher housing costs.
Oregon Home-Price Forecasts Also Predict Rising Costs
Over the last couple of years, home prices in Oregon have risen faster than almost any other state in the country (with the notable exception of Washington). The median home value for the state rose by around 11% over the last 12 months alone, according to the real estate research company Zillow.
As of August 2017, the median home value in the state was around $310,000.
Forecasts for Oregon home prices, extending over the next 12 to 18 months, suggest that home prices will slow down a bit. House values in the state are predicted to rise by around 3% to 5% between now and the summer of 2018. But again, these are an educated guess.
As for home prices nationwide, the economists at Freddie Mac expect to see 4.9% growth during 2018. It wouldn’t be surprising to see home prices in Oregon outpaced the nation next year, as they did during 2017. Limited inventory and strong demand have kept upward pressure on house values. And we can probably expect more of the same in 2018.
How to Succeed When Buying a Home
Forecasts for Oregon home prices and mortgage rates suggest that housing costs overall will increase over the coming months. Additionally, the real estate market is expected to remain highly competitive in 2018 – especially in the Portland metro area.
As an Oregon home buyer, there are steps you can take to improve your chances of success:
1. Get pre-approved for a mortgage. We talked about the tight housing inventory conditions across the state of Oregon. As a result of these trends, desirable properties often receive multiple offers from competing buyers. This one reason why it’s important to have your financing pre-arranged before you start house hunting. Sellers will expect it. Please contact us if you’d like to get pre-approved for a mortgage loan in Oregon.
2. Make a strong first offer. Researching the housing market ahead of time will help you make a strong offer when you find a house that meets your needs. And this could give you an instant advantage over buyers who try to “low-ball” the seller with a below-market offer. You can start preparing for this now, by researching recent sales prices in the area where you want to buy a home.
3. Be willing to compromise. The general outlook for Oregon housing markets suggests that sellers will continue to have more leverage in 2018, and that limited inventory will remain a factor. With this in mind, it’s important for Oregon home buyers to be flexible and open-minded when shopping for a house. Chances are, you’ll have to make one or more compromises regarding the location, the features of the home, or even the price.
Disclaimer: this article includes various forecasts and outlooks relating to the Oregon real estate markets through 2018. Home price and mortgage rate predictions were provided by third parties not associated with our company. We have compiled this information as an educational service for our readers.