Why Oregon’s Middle-Class Homebuyers Are Getting Pushed Out

Oregon’s housing market didn’t sit still over the past five years—it surged, stretched, and then slowed. For families earning under $250,000 a year, the path to homeownership got steeper just as more people were trying to climb it.

Rock-bottom mortgage rates in 2020 sparked a rush to buy, but prices rose faster than wages, tightening the squeeze on middle-income buyers. By 2022, inflation and rising interest rates cooled the frenzy, but not the challenges. In a state where most buyers fall below the $250K mark, these shifts have reshaped what it means to afford a home—and where people are still trying to make it happen.

Rising Home Prices and Affordability Challenges

Home prices in Oregon have increased dramatically in the past five years. Since 2020, the median price of homes rose by roughly one-third statewide.

This continued a longer trend: between 2013 and 2022, home prices climbed far faster than wages. For every $1 Oregonians earned in wage increases, home prices rose about $7.10.

By 2023 the median property value in Oregon was around $454,000, which is about 1.5 times higher than the U.S. average home value. Such price growth has made it hard for many families to afford a home.

Because home prices outpaced income growth, housing affordability worsened. Oregonians are now facing the least affordable housing market since the pandemic began in 2020.

More than one-third of Oregon homeowners spend over 30% of their income on housing costs (a level considered a cost burden).

In 2019, the typical home listing in Oregon was pricey but somewhat reachable; by 2023, the median listing price was 34% higher than in 2019.

In early 2025 the median sale price for an Oregon home was about $486,000. At that price, a family would need a six-figure annual income to comfortably afford the mortgage.

Households earning under $250K include Oregon’s middle class, but many on the lower end of that range have struggled to buy homes as prices soar.

Housing Supply Constraints

One reason for these price hikes is that housing supply has not kept up with demand. Oregon’s population grew steadily (about 21% growth from 2004 to 2023), but home construction did not match this growth.

In the last few years, the number of homes listed for sale dropped, creating a tight market with low inventory. From 2019 to 2023, new listings in Oregon fell by about 32%.

A low supply of homes and high demand pushed prices upward. The state’s housing vacancy rate fell to only ~0.8%, extremely low by historical standards.

Fewer available homes often led to bidding wars, especially in 2020–2021, further driving up sale prices.

For most households under $250K income, these trends meant needing to either stretch their budgets or adjust their home expectations (such as choosing a smaller home or a less expensive area).

Effects of Low Interest Rates and Recent Rate Hikes

Mortgage interest rates had a huge influence on homebuying behavior during 2020–2025. In 2020 and 2021, interest rates on 30-year home loans fell to historically low levels (around 3% or even lower).

These record-low rates were part of the government’s response to the pandemic’s economic shock. Low interest rates reduced monthly mortgage payments, allowing buyers to afford higher-priced homes for the same payment.

For example, a household that could pay for a $400,000 home at pre-pandemic interest rates could suddenly afford roughly a $450,000 home at 2020’s low rates without increasing the monthly payment.

This boosted many buyers’ purchasing power and contributed to the rapid increase in home prices during 2020–2021.

However, interest rates began rising quickly in 2022 as inflation picked up. The Federal Reserve raised its benchmark rates to combat inflation, which led to higher mortgage rates.

Between December 2021 and June 2022, the average 30-year mortgage rate in Oregon jumped from about 3% to 5.3%, a huge increase in just six months. By 2023, mortgage rates averaged roughly 6.8% for the year.

This swift rise in borrowing costs was like “pulling the rug out from under” many prospective buyers. On a typical Oregon home loan (often $400,000 or more), that jump can add hundreds of dollars to the monthly payment.

Higher rates mean buyers qualify for smaller loans; in practical terms, many middle-income families found that homes they could afford in 2021 were out of reach by late 2022.

The impact was a cooling of homebuying activity. As financing became more expensive, some buyers stepped back. Nationwide and in Oregon, home sales volumes fell in 2022 and 2023.

The number of mortgages taken out for primary home purchases dropped about 20% in 2023 compared to the year before. Houses stayed on the market a bit longer, and price growth slowed.

Current homeowners with low fixed rates became reluctant to move (since moving could mean giving up their 3% loan and taking a new loan at 6–7%). This “lock-in” effect further reduced the number of homes for sale.

Even with the late slowdown, home prices did not significantly drop; they mostly leveled off at a high plateau. By 2023–2025, Oregon’s housing market found a new balance with higher interest rates and high prices.

In summary, low interest rates initially fueled a homebuying boom, and the subsequent rate increases cooled demand and strained affordability for average-income households.

Regional Differences in Homebuying Trends

Housing trends in Oregon varied by region. The state has diverse areas, from the Portland metropolitan region to small rural communities, and their real estate markets saw different patterns.

Generally, urban and scenic areas experienced the most intense price growth, while some rural regions remained more affordable (though still pricier than before).

Portland Metro Area

The Portland metro area has the biggest share of Oregon’s population and saw strong demand for homes. Home prices in Portland are higher than the state average.

In 2025, the typical home value in Portland was around $540,000. During 2020–2021, many Portland homes sold quickly, often above the asking price, as buyers competed for limited inventory.

The city did see a shift during the pandemic: with remote work more common, some people chose to move out of the dense city to find larger or cheaper homes in suburbs or smaller towns.

This slightly cooled demand in Portland proper by late 2021, and the city’s population growth even paused around 2020–2021.

Even so, Portland housing remained expensive, and affordability for locals (whose median incomes are far below $250K) became a central concern.

Mid-Sized Cities

Mid-sized cities like Salem (the capital) and Eugene saw moderate price increases. Their home prices are a bit lower than Portland’s but still rose substantially.

Salem’s median home price in 2025 was around $440,000–$500,000 depending on the source. These Willamette Valley cities attracted some buyers who found Portland too costly.

Local buyers in these cities, often with household incomes well under $250K, sometimes found themselves priced out by competition from out-of-town buyers or investors.

Overall, demand stayed solid, and these cities did not have enough new homes being built to fully ease the pressure.

High-Demand Lifestyle Areas

Some regions became hotspots due to lifestyle appeal. Bend, in Central Oregon, is a prime example. Bend transformed over the decade into one of the most dynamic (and expensive) markets in the state.

The city is known for its outdoor recreation and quality of life, which drew many remote workers and retirees, especially during the pandemic.

Homebuying surged in Bend in 2020–2021: at one point, houses were selling after just a few days on the market, often with multiple offers.

Bend’s median home price hit record highs in the mid-$700,000s by 2022–2023, far above what it was a decade earlier. This is an enormous price for any household under $250K income to afford.

Many newcomers from higher-cost areas (like California or Seattle) could pay these prices, sometimes with cash or high down payments, which made it tougher for local middle-income buyers to compete.

The Oregon coast and scenic spots like Hood River also saw increased second-home buying and relocation during the pandemic, pushing up prices there.

Coastal towns are limited in housing supply, so even a modest influx of buyers led to noticeable price jumps.

Rural Areas

In contrast, some rural communities in eastern and southern Oregon remained relatively affordable (in Oregon terms).

In places like Pendleton or La Grande, a typical home might be around $300,000 in 2025. These areas did see home prices rise compared to 2015 levels, but the absolute prices stayed lower than the western part of the state.

The trade-off is that local incomes are also lower, and there are fewer jobs that pay near the $250K mark.

For local families earning, say, $60K–$100K, buying a $300K home is challenging but often more feasible than trying to buy in Portland or Bend.

Some buyers from expensive regions looked to these rural markets for bargains, but long commutes and fewer amenities limit large-scale moves.

Homeownership rates can actually be lower in some rural areas due to economic factors; for example, in Pendleton the homeownership rate was around 56%, a bit below the state average.

Regional Migration Patterns

During 2020–2025, Oregon saw shifts in where people chose to live. In-migration (people moving into Oregon from other states) slowed after 2020, partly due to the pandemic and rising costs.

Some long-time Oregonians left the state for more affordable places. Within Oregon, many households relocated from high-cost areas to lower-cost areas.

For instance, a family priced out of Portland might move to a smaller city like Albany or move further out into the countryside where they can get a larger property for less money.

Retirees in large Portland homes sometimes sold and moved to cheaper towns in Oregon or neighboring states, effectively downsizing their cost of living.

Meanwhile, desirable areas like Bend saw net inflows of residents thanks to remote work—professionals who kept their big-city jobs and incomes but moved to enjoy Central Oregon’s lifestyle.

In summary, big price gaps between regions led some households to relocate in search of affordability or lifestyle, causing a redistribution of housing demand across Oregon.

What Types of Properties Are People Buying?

The vast majority of home purchases were single-family houses, which is the traditional preference for many families.

Single-family detached homes (with their own yard) remained the most sought-after property type, especially for those leaving apartments or looking for more space.

However, with high prices, some buyers under the $250K income mark looked at alternative options like condos, townhomes, or manufactured homes to get a foothold in homeownership.

Single-Family Homes

Most homebuyers, especially those with children or planning families, aimed for single-family houses. During 2020–2025, these houses were in extremely high demand.

Many buyers wanted extra rooms for home offices or bigger yards as remote work and remote schooling became common in 2020–2021.

The competition for single-family homes drove their prices up the fastest. Even households with solid middle-class incomes often had to compromise on location or size due to bidding wars for these homes.

For example, a family making $120K might have hoped to buy a four-bedroom house in Portland, but ended up buying a smaller house or one farther out in the suburbs to fit their budget.

Condominiums and Townhomes

Condos and townhouses are typically more affordable than detached houses, making them an attractive option for first-time buyers and retirees looking to downsize.

In Portland and some larger towns, condos offered a lower-cost entry point into the market (often with prices well below the median house price).

However, Oregon has seen very few new condos built in recent years. Between 2019 and 2023, condos made up just 2% of new home construction in Oregon, which is only one-third the national average rate.

Builders have been hesitant to construct condos due to legal and insurance issues (Oregon’s laws about construction defects made condo development riskier).

Still, many buyers under the $250K income range did choose older condos or townhouses, especially in the Portland metro. These properties often came with HOA fees but were one of the few ways to find a home under a certain price.

During the pandemic, condos in dense buildings were slightly less popular, but by 2023–2025 condos became appealing again as single-family home prices stayed high.

In summary, condos and townhomes remained a smaller slice of the market, but an important one for affordability.

Manufactured Homes

Some Oregon households turned to manufactured homes (mobile homes) as an affordable alternative. Manufactured homes are factory-built houses, often located in specific communities or on private land.

They generally cost less than site-built homes. For moderate-income buyers, a manufactured home can offer the ability to own a detached home at a lower price, though sometimes the buyer must lease the land in a park.

The Oregon Housing report noted that mobile homes are one source of lower-cost ownership. These homes became slightly more popular as price pressures increased.

However, they represent a small portion of overall sales and come with their own challenges (such as financing difficulties and park fees).

Households under $250K, especially those on the lower end of the range, might choose a manufactured home if they cannot afford the local stick-built houses. This is more common in rural areas.

New vs. Older Homes

Buyers also had to consider whether to buy new-build homes or older homes. New construction homes are attractive but tend to be more expensive (and mostly single-family).

Oregon’s new construction remained sluggish relative to demand. As mentioned, homebuilding lagged behind household formation, contributing to a housing shortage.

Many new developments that did occur were in suburbs or smaller cities. Households earning under $250K could rarely afford custom new homes, but some bought new tract houses in growing communities if the prices were within reach.

Others turned to older homes, some decades old, which might be cheaper but possibly in need of renovation.

In summary, single-family homes dominated purchases, but high costs pushed many buyers to consider condos, townhomes, or manufactured homes to find affordable options.

Homebuyer Motivations: Upsizing, Downsizing, or Relocating?

Different buyers had different goals in the past five years. Some were upsizing to larger homes, others were downsizing to smaller ones. Many were relocating for job, family, or affordability reasons.

Upsizing Trends

A significant number of homebuyers in 2020–2022 were upsizing. This included young families buying their first house and existing homeowners who wanted more space as their family grew.

The pandemic amplified this desire: with remote work and remote schooling, many families felt cramped in smaller dwellings and sought larger houses with extra rooms or yard space.

Millennials (people in their late 20s to early 40s) drove much of this demand as they reached prime homebuying age.

Early in the pandemic, low interest rates made upsizing easier. By 2023, upsizing became harder due to high mortgage rates.

Many would-be upsizers, especially those under $250K income, put plans on hold because they didn’t want to trade their existing low-rate mortgage for a new higher-rate loan.

Downsizing Trends

Downsizing is often done by older homeowners or “empty nesters” whose children have moved out. In Oregon, downsizing was a notable trend for some baby boomers and retirees during the last five years.

With home prices so high, older owners could sell their large family house and buy a smaller, cheaper place — possibly in a quieter town or a state with lower costs — and pocket the difference.

Some households under the $250K income mark in retirement downsized to reduce expenses. For example, a couple in their 60s living in a big Portland home might move to a smaller home in a less expensive part of Oregon.

Because the market was hot, even smaller homes were pricey. So, while many sold high, they also had to buy high unless they left the area entirely.

Another factor was the interest rate lock-in: some older owners had very low mortgage rates or even fully paid-off homes, which made it comfortable to stay put.

Still, downsizing provided some supply of larger homes for the next generation (though not enough to satisfy demand).

Relocation Patterns

Relocation has been a major theme in recent years. For households earning under $250K, affordability often drove relocation decisions.

During the pandemic, a notable pattern was people relocating from high-cost, larger cities to smaller cities or rural areas.

Within Oregon, some residents left the Portland area seeking cheaper housing in places like Salem, Bend, or even out-of-state (e.g., southwest Washington, Idaho, or Arizona).

At the same time, Oregon attracted newcomers from even pricier markets like the Bay Area, Los Angeles, or Seattle.

Central Oregon (Bend area) saw many remote workers relocate there, bringing higher incomes and bidding up homes.

Net migration into Oregon slowed around 2020–2022, and by 2023, some data even showed Oregon had a small net loss of population as some people left for more affordable regions.

For those who stayed in-state, regional relocation was key to finding a home they could afford.

Second Home Purchases

Some middle-to-upper-middle-class families in the under $250K range did buy second homes during the boom. Low interest rates and remote work enabled more people to buy vacation homes in desirable spots.

Oregon, with its mountains, coast, and lakes, saw some of this trend. For example, families from the Portland area bought beach cottages on the Oregon Coast or cabins in Central Oregon for retreats.

At the peak, about 5% of all mortgage loans in 2021 were for second homes, compared to the usual 3% level before the pandemic. By 2023, only about 3% of mortgages were for second homes.

Higher interest rates and soaring home prices made second homes less accessible in 2022–2025. Still, some households under $250K (especially those closer to that upper end) did manage to purchase second homes.

In Oregon, typical second-home locations include coastal towns, Central Oregon, and the Mt. Hood area.

While second-home buying isn’t the norm for most under-$250K households, it was a noteworthy part of the 2020–2021 frenzy and then receded.

Comparing 2020–2025 vs. 2010–2019 Homebuying Trends

It’s helpful to compare the last five years with the prior decade to understand what’s unique and what’s a continuation of past trends.

Home Price Trends

In 2010, Oregon was coming off a housing market crash. Home prices were relatively low around 2010–2012, and then they steadily climbed throughout the 2010s as the economy recovered.

From 2010 to 2019, Oregon’s median home prices rose significantly (over 50% increase in that period), but that growth was relatively gradual year to year.

In contrast, 2020–2022 saw an abrupt price spike. In just about two years, Oregon home values jumped by more than 30%, followed by a plateau when interest rates went up.

Affordability in the 2010s was challenging but not as extreme as in the 2020s. By 2023, affordability hit an all-time low nationally, worse than any year in the prior decade.

Homeownership Rate Changes

During the early 2010s, homeownership rates were actually falling. Many people lost homes in the late-2000s recession or delayed buying due to tight credit.

By 2019, Oregon’s homeownership was roughly back to ~63%. In 2020, the rate nationally jumped, but by 2025, the homeownership rate in Oregon was roughly back to the mid-60s%.

Despite the intense market, the overall share of homeowners didn’t massively increase; many would-be first-time buyers were kept in renting.

One notable difference: in the 2020–2025 period, there was a foreclosure moratorium during the pandemic, so very few people lost homes compared to the early 2010s.

Buyer Demographics

The prior decade had a higher share of first-time buyers and younger buyers, especially toward the end when the economy was strong.

In the 2020–2025 period, the median age of homebuyers jumped to record highs. By 2022–2023, the typical first-time buyer was 36–38 years old (much older than a decade ago).

The share of first-time buyers fell to only about 26%–28% of all buyers in 2022–2023, compared to around 40% long-term average.

The 2020s also saw more multi-generational buying – families combining households to afford homes, a trend less pronounced in the 2010s.

Interest Rates and Financing

The 2010s experienced relatively low and stable interest rates after the recession. Most years saw mortgage rates between 3% and 4.5%.

The 2020s had extremes: 2.7% in late 2020 to 7% in 2023 – a swing not seen in such a short time in decades.

In the 2010s, buyers could plan knowing rates would likely be reasonable; in 2022–2023, many buyers were squeezed out as rising rates threw off their budgets.

Also, cash purchases became more common in the 2020s. For an average household under $250K income, competing with cash buyers has always been a challenge, but it became notably common in 2021–2022 to lose out to cash offers.

Housing Supply and Construction

The 2010s started with an oversupply of homes in some markets and then flipped to undersupply. By the late 2010s, Oregon had a recognized housing shortage.

The 2020–2025 period saw even tighter supply due to factors like people staying put and not enough new construction.

The need for more housing (especially affordable starter homes) became a louder political issue in the 2020s. Oregon’s governor in 2023 set ambitious goals to boost homebuilding.

In summary, the 2010–2019 decade was a recovery period for Oregon housing, while the 2020–2025 period was more turbulent: a sudden boom followed by an affordability crunch.

For households under $250K, the prior decade offered some windows of opportunity, while the recent five years have been more challenging overall, except for those who bought when rates were at rock bottom.

References

• Oregon’s first statewide housing report paints grim portrait of affordability – Oregon Public Broadcasting
• Oregon Developers Build Few Condos. A Pending Bill Aims to Increase Production – Willamette Week
• First-Time Home Buyers Shrink to Historic Low of 24% as Buyer Age Hits Record High – National Association of Realtors
• Second Home Purchase Demand Dropped Significantly in 2023 – National Mortgage Professional
• Bend’s Housing Market – Cascade Business News
• Oregon Housing Market: 2025 Home Prices & Trends – Zillow
• What is the homeownership rate in Oregon? – USAFacts (using U.S. Census Data)