About this time last year I wrote about my predictions for Portland real estate in 2025. If you want the tl;dr digest, here’s what I predicted for 2025:
- Interest rates would end the year in the 6% range, but wouldn’t be a meaningful drop from where we ended 2024 (just under 7%).
- New listings and sales, which had essentially bottomed out in 2024, would show some incremental increase.
- Prices wouldn’t meaningfully change.
I also closed that post by saying I’d be back in a year to either say “told ya so!” or I’d quietly delete the post.
The post is still there, and I (mostly) told ya so.
First, the interest rates. I’ll concede that they did drop more than I had expected, but still not to a point where it’s market-moving.
The first 2025 reading we got for the average 30-year mortgage rate was 6.93%, on January 9. A week later that went to 7.04%, which happened to be the highest mark it would be all year. As of this week, it’s at 6.16%. That is a significant improvement– enough to knock $250 a month off of a $500k loan– and represents the lowest we’ve seen it since September 2024. Still, I believe it won’t have the “wow” factor it needs to really move the market until the headlines have a five instead of a six. That’s as long as the reason for it going under 6% isn’t because of other negative economic news and, well, let’s not dwell on that too much.
As for new listings coming on market, they did show some incremental increase.
New listings in our part of the metro were up 6% from the previous year, which is a great indicator that more sellers that were feeling locked in to their equity and low interest rates are going on market. I saw a stat the other day that helps illuminate this. Prior to 2025, more homeowners in Oregon had mortgage rates lower than 3% than ones whose rate was 5% or more. That changed in 2025– there are now more homeowners with rates higher than 5% than ones lower than 3%. The effects of our COVID-era market (with rock bottom interest rates) continue to roll off the books with more distance, so to speak. Reducing the lock-in effect is essential to increasing inventory.
Closed sales didn’t show the 6% rise that listings did, but they did show improvement:
Sales increased 3.3% from 2024, compared to a 2.3% increase from 2023 to 2024. We’ll take it!
Onto the all-important sale prices:
2025 ended with a median sale price of exactly $600,000. That’s less than 1% higher than 2024, and as you can see from the graph above hasn’t materially changed in the last four years.
So here we are in 2026 with prices right where they’ve been for the past several years, and interest rates at the lowest point we’ve seen in fourteen months. I’m not going to write a whole post about my predictions for 2026, but I do think we’ll see more of the same. There will continue to be downward pressure on rates (which may cause some increase to prices), there will continue to be an incremental increase in listings and sales (which could counteract an increase in prices caused by lower interest rates), and home affordability won’t radically change.
In January of 2027 I’ll be back with an “I told you so” or I’ll quietly delete this post.
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