Oregon homebuyers need a six-figure salary to afford a typical home, study finds
PORTLAND, Ore. (KOIN) – Looking to buy an Oregon home in 2024? You may want to sit down to read this.
A typical home in the state now requires a six-figure salary, according to a new study from the financial team at Bankrate. In fact, nearly half the states in the country do, too.
The study found Oregon ranks 13th among states with the highest annual income needed to afford a median-priced home, which prices out to roughly $402,343 nationally.
Americans, on average, need a salary of $110,871 for homeownership. In Oregon, that number jumps to a whopping $120,000. That means Oregonians looking for a $482,800 home will need to pay an average mortgage payment of $3,013 each month.
These costs are according to an analysis of sale price data, tax data and insurance data in January 2024. The study also compared this year’s numbers to 2020 and found a near-50% jump for half of the U.S., including the District of Columbia.
In Oregon, the average salary required to buy a typical home in 2020 was $88,334. Since then, it has grown nearly 46.2% while most salaries remain the same.
Along with elevated prices and increasing mortgage rates, first-time home buyers also need to contend with an ongoing shortage of houses across the U.S. The reason? Those with low mortgage rates are keeping their homes to avoid paying more per month for their next house.
“Over the past few years, the supply of homes has been constrained by a number of factors, including muted homebuilding and the lock-in effect,” housing analyst Jeff Ostrowski said. “But demand for homes has been growing, and there are more buyers than sellers.”
The state with the highest required income is California with an average of $197,057 necessary to buy a $739,200 home with a $4,598 mortgage per month. The next most expensive state is Hawaii, followed by the District of Columbia.
Ostrowski reports that, with home values at near-record highs, “if you want a house, you have little choice but to pay a high price.”
“Affordability is the biggest issue – finding a home that’s in your budget. The higher the price of a home, the harder it is to come up with the down payment or to qualify for the monthly payment,” Ostrowski said.
Meanwhile, the most affordable state is Mississippi, where an income of $63,043 can land you a $228,500 home with a monthly mortgage of $1,471.
But should housing costs deter you from buying a home when you can? Considering the financial security that comes with homeownership, Ostrowski said it’s better to buy a home than to not.
“If you’re ready to buy, then buy. There’s no guarantee that the market will become more favorable for buyers,” he said.