A family in the Portland Metro area making the median income ($63,800 in 2007 according to HUD) cannot afford to purchase a median priced home in the area ($295,000 in June). According to a formula from NAR, a median income family in the Portland Metro area can only make up 88% of a monthly mortgage payment that has a 20% down payment and 30 year fixed rate.
This is the lowest affordability rate recorded since RMLS™ began tracking the data in 1994. However, this may be affected by changes to the way that HUD calculates median income.
I looked at the HUD data and I am not sure how their data translates to the 88% affordability number reported for Portland so I’m not sure how to compare it to other markets. It is concerning that the 88% is the lowest it has ever been in our market.