Oregon — Over the past 40 years, Oregon’s middle class has watched the dream of homeownership drift further out of reach. The trends over that time show that while real household incomes have increased modestly since the 1980s, housing prices have soared more than fourfold creating an alarmingly steep decline in affordability.
According to the Federal Housing Finance Agency’s All-Transactions House Price Index (FRED, ORSTHPI) Oregon’s home-price index rose from about 162 in 1985 to more than 848 in 2025, a 420 percent increase. Real median household income in 1985 was $21,890. The Oregon Employment Dept shows median incomes adjusted to 2023 dollars, for 1985 that was about $59,000, which has grown to $88,740, an increase of roughly 40 percent (Oregon Employment Department).
“Comparing the estimated mortgage payment to the median monthly household income, we see that the share spiked in 2023. This is in part due to the median housing price growth outpacing the growth in the median household income.” said economist Jake Procino of the Oregon Employment Department. “Housing prices have skyrocketed recently and the effects are felt by all across all of Oregon.” (QualityInfo.org)
Prices Up, Incomes Lagging
In 1985, a typical Oregon family earning the median income could buy an average home with about three years of pay. Today, that same home would cost the equivalent of at least eight to ten years of income, depending on the region, a more than threefold increase in relative price.
The Oregon Housing and Community Services Department’s 2024 State of the State’s Housing report found that only 29 percent of Oregon households could afford an average home in 2023, which is down from 53 percent in 2013. Between 2019 and 2023, listing prices increased 34 percent while the number of available homes fell 32 percent, as the Employment Department showed in their analysis.
A Widening Gap
Real household income, adjusted for inflation, increased gradually from about $64,000 in 1985 to $88,740 in 2023. But housing prices grew five times faster, outpacing both wages and inflation.
The divergence accelerated during two key periods: the housing boom of the early 2000s and the post-pandemic surge. From 2000 to 2007, home prices jumped more than 70 percent, while real incomes rose less than 10 percent. After a brief correction in 2008, prices rebounded sharply, and after 2020, they exploded again as low mortgage rates and in-migration collided with limited supply.
By 2025, Oregon’s price-to-income ratio—the relationship between indexed home values and household earnings had nearly doubled since 2000, rising from about 5.7 to 9.6.
Put simply, homes are now twice as expensive relative to income as they were a generation ago.
Even two full-time earners in Portland or Bend often cannot afford a starter home without substantial savings or family assistance.
The divergence became particularly sharp during two key periods:
- The 2000s housing boom: Between 2000 and 2007, Oregon home values climbed by more than 70 percent while real incomes grew by only 6 to 8 percent. When the Great Recession hit, prices briefly dipped, but incomes also stagnated, and the rebound after 2012 sent home prices soaring far faster than earnings.
- The post-pandemic surge: From 2020 to 2023, the combination of record-low interest rates, remote-work migration, and constrained supply drove another 30 to 40 percent jump in home values across Oregon’s major metro areas. During that same period, real incomes barely moved after accounting for inflation.
As a result, the price-to-income ratio, a common measure of affordability that compares the cost of homes to what households earn, has widened dramatically. In 2000, the ratio stood at about 5.7, meaning the indexed home price was roughly 5.7 times higher than the real income per $1,000. By 2025, that number had climbed to 9.6, according to analysis of FRED data.
Put simply, homes are almost twice as expensive relative to household income as they were a generation ago. In practical terms, where a typical family might have needed to spend three to four years’ worth of income to buy a median-priced home in 2000, that same home now costs closer to six to seven years of income, even before accounting for higher interest rates or down-payment requirements.
The outcome is a housing market increasingly disconnected from Oregon’s wage base, one where even families earning at or above the median income struggle to afford a starter home, and where homeownership has become less a marker of middle-class security than of timing and luck.
Generational Divides
Homeownership in Oregon differs sharply by age group. According to the Urban Institute’s projection for Oregon, households younger than 65 have a homeownership rate of 57.5% in 2020, while those 65 and older are at 77.6% according to a report from the Urban Institute.
Another report from the Oregon Employment Department shows the divide for younger adults. “Of all age groups, Oregon householders under 35 are the only age group that has more renters than owners, with 68% of those householders renting.” Younger residents tend to have less income and wealth, are more likely to be in school, and less likely to have children—factors that delay purchasing a home. For householders aged 35 to 64, about 60% to 70% live in owner-occupied homes, while ownership peaks among those 65 to 74, with 80% owning their homes. Even among those 75 and older, most remain homeowners.
The department also notes that “about half of renters in Oregon are cost burdened,” compared with roughly one in three homeowners with a mortgage. Median rent in Oregon reached $1,500 in 2023, while the median household income for homeowners was $100,300, nearly double that of renters ($53,700). The agency concludes that renters, who are disproportionately younger and nonwhite, face the highest housing cost burdens in the state, a divide that continues to reinforce Oregon’s generational and income-based gaps in homeownership.
Policy Choices and Population Growth
Analysts say Oregon’s affordability crisis stems from a combination of land-use laws, limited supply, and rising demand. Oregon’s Urban Growth Boundary, created to preserve farmland and manage sprawl, also constrains housing expansion around cities. That policy has been praised for environmental stewardship but criticized for restricting supply as population grows.
As Paul A. Diller explained in The Challenge of Housing Affordability in Oregon, “Oregon’s modern land use system was created in the 1970s and 1980s” to manage growth after federal housing support waned. The state’s Goal 14, Urbanization, requires cities and counties to maintain urban growth boundaries that “include all lands needed or projected to be needed for urban uses … over a twenty-year period.” Diller notes that research shows “UGBs raise land prices within the boundary,” though “the evidence does not clearly show that UGBs raise housing prices … if zoning permits sufficiently high degrees of density.”
A 2024 report from the Portland-based Cascade Policy Institute, The Affordable Housing Scam by analyst Randal O’Toole, argues that Oregon’s affordability crisis stems not from a shortage of subsidies but from limits on land supply. “U.S. taxpayers spend tens of billions of dollars a year subsidizing housing for low-income households,” O’Toole writes, noting that “subsidized housing costs about 20 percent more per square foot than unsubsidized homes.” He attributes Oregon’s high housing prices to “growth-management laws” that “required all major cities in the state to draw urban-growth boundaries that ultimately included only 1.25 percent of the land in the state.” With “Oregon just 1.1 percent urban,” O’Toole argues that artificial scarcity has pushed home values to record highs.
The report also cites research showing that “for every five units of subsidized housing, about four fewer units of unsubsidized housing are built,” meaning subsidies add little net supply. “Housing has become unaffordable in Oregon due to a lack of supply,” he concludes. O’Toole recommends ending project-based construction programs and shifting to “tenant-based voucher subsidies.” His broader argument is that affordability will not return until Oregon and other states “abolish urban-growth boundaries and other rural restrictions on housing developments.”
Real-World Consequences
Affordability pressures are not confined to Portland. As Vogt documented, “Median household income ranges from a high of $103,486 in Washington County to a low of $46,315 in Wheeler County.” The Oregon Housing and Community Services Department found similar patterns in housing costs, with rural regions facing slower wage growth and fewer listings.
The numbers translate to real hardship. Fewer young families can afford to buy, renters face higher monthly costs, and older homeowners struggle to keep up with property tax increases. Mortgage rates, which have doubled from pandemic lows, further limit affordability. In 2025, Oregon’s homeownership rate hovers around 62 percent, near its lowest point in decades. Renters now make up nearly half of all households statewide.
Unless supply expands and costs stabilize, Oregon’s housing affordability gap, documented across every official data source from the FHFA to the Oregon Employment Department, will remain a persistent economic divide across the state.
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