Buying Your First Home in Portland, OR? Here’s How Much Money You Need to Make

It’s less than Seattle, but you still need well over six figures.

Portland, OR, is known for its quirky vibes, lush urban parks, and delicious Pacific Northwest cuisine. In addition to being a unique and rewarding place to live, Portland is also home to a competitive real estate market that’s seen many changes over the past few years. 

For many, buying a home in Portland is a dream come true, but it’s also important to know how it will impact your finances. From down payments to monthly mortgage payments, there’s a lot to understand before buying your first home 

So whether you already live in The City of Roses or are looking to relocate to the area, here’s a breakdown of the income you’ll need to purchase your first home in Portland.

Check out our original report for a detailed nationwide analysis.

How much income do you need to buy a starter home in Portland?

The median sale price of a starter home in Portland is $401,840. In order to afford this, first-time homebuyers in Portland should make $130,715 per year, up 6.0% from 2023. However, the median income in Portland is $101,552, meaning the typical resident cannot afford a starter home.

As expected, starter homes in Portland are more affordable than the average home (all price brackets combined; see methodology for details). In order to afford any median-priced home in the area, you’ll need to make $149,023 (as of October 2023). 

Nationwide, you need an income of $75,849 to afford a typical starter home, which costs an average of $240,000. The average U.S. household earns an estimated $84,072.

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First-time homebuyers’ guide to the Portland housing market

Portland has experienced a mixed market over the past few years. House prices have only risen by 1.3% since January 2021, but the metro saw sharp rises and drops during and following the pandemic.

The pandemic-driven housing migration boom affected Portland similar to many other coastal metros; more people looked to leave than stay, with buyers searching for sun and affordability. Portland actually lost 3.3% of its population from 2020-2023, a dramatic shift following nearly a decade of sustained growth. This change, along with high mortgage rates, helped drop house prices by 21% from May 2022 to January 2023, from a high of $580,000 to $456,000. Another price spike and drop followed soon after before leveling out in early 2024.

Importantly, Oregon also has the nation’s highest rate of chronic homelessness. The issue is especially severe in Portland, with the unhoused population increasing 65% from 2015-2023.

There’s a lot to love about Rose City, though. If you’re looking to move to Portland, the city is home to many famous and eclectic amenities and attractions throughout its diverse neighborhoods. Forest Park, Powell’s Books, and the Hoyt Arboretum are some of the most well known, offering natural beauty and entertainment for people of all ages. Portland also offers 400 miles of bikeways, breathtaking scenery, and is within a few hours from the coast and Columbia River Gorge.

Some popular neighborhoods in Portland include the Pearl District, Hawthorne, and Buckman. 

What does a typical down payment look like for a starter home in Portland?

Here are some common down payment amounts for a typical $401,840 starter home in Portland:

Down payments can range from 0% to 100% of the total house price, depending on your budget, loan type, and long-term priorities. While experts have historically recommended budgeting for a 20% down payment, the increasing cost of homes and continued sluggish wage increases has led to a 15% down payment becoming more common. 

Some loan types allow for lower down payment amounts. For example, a Federal Housing Administration (FHA) loan requires just 3.5% down, while the lowest possible down payment for a conventional loan is 3%. These amounts typically depend on your credit scores, so buyers with higher credit scores may qualify for lower down payments.

What is the typical mortgage payment for a starter home in Portland?

The typical monthly mortgage payment for a starter home in Portland is $3,268. This assumes you put 3.5% down and have around a 7% interest rate.

If this payment sounds too high, you could consider renting an apartment in Portland. The average rent price is $1,802, possibly making it a better option while you save for a down payment on a house. You can also use an affordability calculator to see what you can afford based on your income and down payment.

What should you do next?

If you’re in the market for your first home in Portland, it’s important to understand how much house you can afford. Take your annual income, credit score, the current mortgage rates, and local market trends to make a decision that works best for you.

From there, a Portland agent can help you navigate the entire home buying process and provide valuable local expertise. To learn more about how to buy a home, check out Redfin’s First-Time Homebuyer’s Guide.

Methodology

Redfin divides all U.S. properties into five buckets based on Redfin Estimates of homes’ market values. There are three equal-sized tiers, as well as tiers for the bottom 5% and top 5% of the market. Redfin defines “starter homes” as homes whose sale price fell into the 5th-35th percentile of the Redfin Estimate tier. 

We calculated the annual income needed to afford a starter home by assuming a buyer spends no more than 30% of their income on housing payments. Housing payments are calculated assuming the buyer made a 3.5% down payment and also take a month’s median sale price and average mortgage-interest rate into account. 

The national income data is adjusted for inflation using the Consumer Price Index. 2024 income is estimated based on projections from the U.S. Census Bureau’s (ACS) 2022 median household income using the 12-month moving average nominal wage growth rate. The rate was compiled from the Current Population Survey and reported by the Federal Reserve Bank of Atlanta.

We assume housing payments include the mortgage principal, interest, property taxes, homeowners insurance, and mortgage insurance (when applicable).

All data sourced February 2024 unless otherwise stated.