Home prices across the Portland, Oregon metro area have risen steadily and significantly over the last couple of years. As a result, the average closing costs for Portland home buyers have also increased. Here’s a look at what current closing costs might be for a median-priced home in the area, updated for summer/fall 2017.
Average Buyer Closing Costs in Portland
On average, home buyers in Portland tend to pay somewhere between 3% and 5% of the home’s purchase price in closing costs. But that range is not necessarily set in stone. Typically, the buyer’s costs amount to around 4% of the home’s purchase price. So that’s a good number to use for our purposes of calculating an average.
According to the Regional Multiple Listing Service, the median home price in Portland, Oregon rose to $390,000 in June 2017. That was an increase of 7.7% from the same month a year earlier. So closing costs have risen as well.
If we use that number ($390,000) as a starting point, we can get a sense for what the average closing costs would be for a home buyer in Portland:
- At 3.5% of the purchase price, closing costs would come to around $13,650.
- At 4.0%, a home buyer’s total costs would be around $15,600.
- At 4.5%, it would come to $17,550.
This is by no means a definitive guide to closing costs in Portland. There are a lot of variables, as mentioned below. But it does give us some insight into the average costs a buyer might pay, based on the median home price as of August 2017.
Variables That Can Affect Your Bottom Line
Closing costs can vary widely based on a variety of factors. The price of the house being purchased plays a big role. But there are other influencing factors as well.
For example, some borrowers choose to pay “discount points” in exchange for a lower mortgage rate, while others forgo this option. This is just one variable that can affect your overall borrowing costs.
But we’re talking about averages here, so we shouldn’t get lost in the weeds. The numbers presented above are a pretty good estimate of average closing costs for Portland, Oregon home buyers.
Home Prices Expected to Rise Into 2018
The bigger story here is that house values in Portland are expected to continue rising through the end of 2017 and into 2018. In fact, home prices across the metro area will probably continue to outpace the national average over the coming months, as they’ve done in the past.
There is currently an imbalance between supply and demand within the Portland real estate market. According to local MLS data and real estate reports, the city had less than a two-month supply of homes for sale as of July 2017. A “balanced” real estate market has about five to six months worth of supply, according to economists.
So there just aren’t enough properties listed for sale to satisfy the current level of demand. This is putting steady upward pressure on home prices, which is why the average closing costs for buyers in Portland is higher today than in previous years.
The economists at Zillow recently issued a forecast for the Portland housing market that calls for continued price growth. In August 2017, they predicted that the median home value in Portland would rise by 4.3% over the next 12 months. This 12-month outlook extends into the summer of 2018.
The key takeaway here is that average closing costs for Portland, Oregon home buyers are higher today than they were last year. And they will likely be higher next year than they are right now. This is the result of steady home-price appreciation, which partly stems from the supply and demand imbalance we are seeing across the metro area.
Home buyers who are “on the fence” about buying now versus in 2018 should pay close attention to these trends. Those who postpone their purchases until later in 2017 or 2018 will likely encounter higher home prices and closing costs.