Summary: Should you rent an apartment or buy a home in Portland, Oregon? Recent data relating to home prices and rents appear to make a strong case for buying in 2020.
Earlier this year, we crunched some numbers to come up with an average monthly mortgage payment in Portland, Oregon. By using median home-price data, along with current mortgage rates for a 30-year loan, we determined that the average monthly payment would be somewhere around $1,719.12.
Renting or Buying in Portland: It’s a Close Call
So how does that compare to the average rent in the Portland area? Is it more affordable to buy or rent a home in Portland?
According to data gathered by Zillow, a rental estate research company, the costs of renting and buying a home in Portland are very similar. As of February 2020, the average apartment rent within the city was $1,995 (regardless of size or number of rooms).
Buying a home in Portland can actually afford you with lower mortgage payments every month compared to rent. By calculating the median home price of $454,600 (as of February 2020), average down payment of 15%, and the current mortgage rate of 3.45%, we found that the average monthly mortgage payment for someone buying a home in Portland would be $1,719.12. So, statistically speaking, renting in the city might actually cost you more. And when you buy, you can probably get much more space for an extra couple hundred dollars a month.
Other Rent-versus-Buy Considerations
Your monthly housing costs are one of the most important considerations, when deciding whether to rent or buy. But there are other factors as well:
Maintenance and upkeep. When you rent a home or apartment in Portland, you’ll have little to no maintenance. But when you buy a home, you’re responsible for all of the upkeep and maintenance. Depending on the property, this might be a lot of work, or a little. You just have to make sure you’re up for it, before making that kind of investment.
Home price appreciation. You’re house is your home, whether you rent it or buy it. But if do purchase the property, it becomes an investment as well. So you want to consider resale value, when deciding whether to rent or buy in Portland. Home prices in the area have risen significantly over the last couple of years. And while they slowed down a bit in 2019, they’re expected to rise in the foreseeable future.
The length of your stay. Generally speaking, buying a home makes more sense for those who are planning a relatively long stay, of a few years or more. If you think you’ll be staying in the Portland area for at least the next few years, it might be a good time to buy. Renting might make more sense if you’re not sure about your long-term plans, or if you know you’ll be moving again in a couple of years.
The freedom factor. You’ll gain more freedom from buying versus renting a home in Portland. Homeowners are able to make all sorts of changes to their properties, from landscaping to renovations and more. Renters, on other hand, usually have limited (or no) freedom to make such changes. When you buy a home, you can truly make it your own.
As you can see, there are a lot of angles to consider when weighing the benefits of renting or buying in Portland. The cost factor is an important consideration, but it’s certainly not the only one.
Need a Loan Estimate?
Having an estimate of your monthly housing costs will help you decide if renting or buying is right for you. And we can help. At Sammamish Mortgage, our financing experts can give you an estimate of your monthly mortgage payments and closing costs, based on the amount you want to borrow, as well as answer any questions you may have about our many mortgage programs. Contact us today to get started.