Portland Rent vs. Buy a Home – 2022 Statistics
Homeownership makes people happy.
Study after study shows that homeownership positively effects a person’s life in more ways than financial security.
The below is a report from NATIONAL ASSOCIATION OF REALTORS® research division, article, “Social Benefits of Homeownership and Stable Housing.”
Rohe and Stegman found that low-income people who recently became homeowners reported26 Rohe, W. and R. Stegman. 1994. “The Effects of Homeownership on Self Esteem, Perceived Control, and Life
higher life satisfaction, higher self-esteem, and higher perceived control over their lives. 26
But the authors cautioned on the interpretation of the causation since residential stability was not
controlled for. Similarly, Rossi and Weber concluded that homeowners report higher self-esteem
and happiness than renters. 27 For example, homeowners are more likely to believe that they can
do things as well as anyone else, and they report higher self ratings on their physical health even
after controlling for age and socioeconomic factors. In addition to being more satisfied with
their own personal situation than renters, homeowners also enjoy better physical and
psychological health. 28 Another study showed that renters who become homeowners not only
experience a significant increase in housing satisfaction, but also obtain a higher satisfaction
even in the same home in which they resided as renters. 29
Satisfaction of Low Income People,” Journal of the American Planning Association, 60(2), pp. 173-84.
27 Rossi, P. and E. Weber. 1996. “The Social Benefits of Homeownership: Empirical Evidence from National
Surveys,” Housing Policy Debate, 7, pp. 1-15.
28 Rohe, Willam M., Shannon Van Zandt and George McCarthy 2001. The Social Benefits and Costs of
Homeownership: A Critical Assessment of the Research. Low-Income Homeownership Working Paper Series
LIHO-01.12, Joint Center for Housing Studies of Harvard University.
29 Luis Diaz-Serrano. Disentangling the housing satisfaction puzzle: Does homeownership really matter? Journal of
Economic Psychology. Amsterdam: Oct 2009. Vol. 30, Iss. 5; pg. 745
Downpayment Help and Grant Options for Lower Income Home Buyers
Read the latest list here. We annually updated the list of homebuyer grant and downpayment assistance options.
Buy a Home and Stay Put for a Bit
When you have all in order—positive debt-to-income ratio, consistent income for two years, and savings for a down payment—it might be tempting to start house hunting in earnest. But first make sure you want to stay put for a while. If you buy and sell too soon, it can hurt you financially. Every year we put out this rent vs buy report in Portland and include a calculation of how long it takes before you’re financially better off owning than renting. This length of time ensures equity building and prevents the loss that comes from selling too soon.
This time last year, we reported a Portlander was better off financially after three years and one month of owning a home than a renter.
Rent Vs. Buy a Home in Portland 2022
In 2022, a Portlander is better off owning than renting financially, after three years and six months of home ownership. This rent vs. buy formula is determined by current mortgage rates (including other costs of ownership), average local home prices, and average local rental rates.
The time it takes to be better off with homeownership could increase a little this year as mortgage rates are predicted to rise in 2022 to 4%.
Last year the rate hit a crazy low of 2.65%, which helped the formula.
Also, interest rates are still low, but they’re expected to increase from the current 3.22% for a 30-year fixed-rate mortgage to 4% by end of 2022.
Portland rental rates were trending down for a few years (2019-2020) but have started to climb again.
More Ways than Ever to Generate Income from Homeownership
Portland now allows the average home to have two ADUS (additional dwelling units) on the lot. These ADUS could take the form of a basement apartment, backyard tiny home, or some other similar arrangement. A number of Portlanders I know are taking advantage of the new rules and have been able to pay their mortgages or dramatically supplement their income by renting out ADUS on their lot.
More and more Portland homes for sale also now come with ADUS already and often you can use that potential (or current) rental income to help qualify for the loan. We can give you a local lender recommendation to help see if you qualify.
Our Portland home for sale website has a special filter built in to help home buyers find properties for sale that have ADUS ready to rent or high potential for ADUS to be added. Check out our extra living quarters filter for Portland homes for sale here.
Also, when thinking on the return on your investment, according to our annual report, Portland homes with ADUs sell for 8% more than homes without ADUs.
Home Equity is the Answer to Financial Security
In the end, equity is the answer. Buying is still your best bet. And timing is key. Whether you’re ready to buy now or whether you need a couple more years to get your finances in order, keep your sights set on home ownership. It is proven to increase financial security and well being overtime. Otherwise, your hard-earned money will line the pockets of your landlord, rather than your own. Home equity is like a personal savings account, historically the largest and best investment any of us can make in our lifetimes.
If you’re ready to buy now, or if you have questions about buying a home in the future, our top 1% Portland buyers agents are happy to answer all of your questions. Give us a call today at 503-773-0000 or chat with our bot on this site.January 21, 2022