Portland Housing Trends 2018


Jolynne Ash

Buyer's Agent

Berkshire Hathaway Northwest
Cell: 503-804-1608
Email: jolynne@portlandmyway.com Licensed in the State of Oregon

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Economic experts have begun weighing in on the expected Portland housing trends 2018. This article reflects the national trends (Portland has been well ahead of the trend for the past 3 years). The national real estate appreciation for 2017 was 6.2% (Case-Shiller) while Portland Metro was 8.5% (RMLS).Interest rates are set nationally. Also, see Portland Forecast for 2018.

Housing TrendsIncrease in Home Purchases
Every industry expert whose opinions we looked at agreed: Purchase mortgage volume will increase in 2018. In fact, Michael Fratantoni, chief economist and senior vice president of research and technology of the Mortgage Bankers Association (MBA), expects purchase growth through 2020. Freddie Mac’s Economic and Housing Research Group (EHRG) has predicted growth of about 2% next year in both new and existing home sales. While refinancing has been strong recently, we’re now seeing a slow shift to a purchase-oriented mortgage market. Which leads us to …

refinancingDecline in Refinancing
EHRG, Realtor Magazine, MBA, Moody’s, and Fannie and Freddie are all looking for refinance activity to decline next year, although CoreLogic is estimating that 250,000 FHA mortgagees could refinance into conventional loans in 2018. This could help borrowers cut monthly payments by canceling FHA annual insurance.

EHRG does predict cash-out refinances to climb to a larger percentage of the refinance market, although EHRG and Realtor Magazine both predict refinances overall will decline to 25% of the mortgage market, the lowest percentage since 1990. Rising interest rates will contribute to the drop in refinancing, according to MBA’s Fratantoni.

interest ratesRise in Interest Rates
Speaking of rising interest rates, economists at the MBA predict mortgage interest rates on 30-year fixed-rate loans to rise to 4.6% in 2018, and to more than 5% in 2019. The Federal Housing Finance Agency (FHFA) agrees that rates will hit the mid-4% range next year and mid- to upper 5% range by 2020.

market forecastInventory Issues
Low inventory across the country will continue to remain a challenge for homebuyers in 2018. Experts state that low new housing starts and soaring prices are keeping purchase numbers down. First-time buyers and millenniums are the most impacted by the lack of affordable housing. As more homeowners see the difficulties of affording a new home in this climate, they may choose to stay in their current homes longer, which will also impact inventory. Based on a recent survey, Zillow predicts that the shortage of affordable homes will also push housing prices to climb more than 4% in 2018, exacerbating the problem and forcing millenniums to remain renters.

Everyone has been talking about the tight inventory but I think we are OK calling it a straight-up inventory crisis at this point. We just don’t have enough homes. – Svenja Gudell, chief economist at Zillow


The takeaway from all of this is that if you are a potential home buyer that is on the fence or dragging your feet, these predictions should create a sense of urgency, as your purchasing power will only decrease if the predictions above are true. Buying now could be the best choice before you get priced out of the market.


Jolynne Ash


Berkshire Hathaway Northwest
Cell: 503-804-1608
Email: Jolynne@@DreamStreetRE.com
Licensed In The State Of Oregon