A millennial couple with two children struggle to find an ideal home in Portland, Oregon, despite earning a quarter of a million dollars a year combined.
Laura and Samuel Graves, both 36, are raising their children in an apartment in a suburban area of the city, but have been looking for a home for the past three years. Business information reported.
At first glance, their financial situation makes it seem obvious that they could afford a house. Laura Graves works as a financial analyst and Samuel is an electrician, and together they earned $250,000 last year.
But most of the homes they are interested in would require monthly mortgage payments of at least $5,000, nearly half of their monthly take-home income of $11,000.
Experts say it’s generally best to spend no more than 28 percent of your income on housing, a rule of thumb that’s becoming increasingly difficult to follow as home prices and mortgage rates have skyrocketed over the past four years.
Laura Graves (pictured) and her husband Samuel earn $250,000 a year together, but can’t find a house they like that fits their budget.
“We refuse to become ‘house poor’ and, like many others, are choosing to wait until the housing market becomes reasonable again,” Laura Graves told Business Insider, referring to the term meaning that a home purchase has left someone struggling financially.
Until the married couple can find a family home that has monthly payments closer to $3,000 to $3,500, they will continue to rent their $2,700-a-month two-bedroom apartment.
There are signs that the U.S. housing market is finally cooling off after years of record appreciation and high borrowing costs.
Prices appear to be falling in certain areas, especially Florida, thanks to a number of factors, including declining demand.
But unlike much of Florida, where home prices are also falling due to fears of natural disasters and rising insurance costs, homes in Portland generally cost the same as they did a year ago, according to Zillow Data.
Homes aren’t cheap in Portland, as it was ranked the 15th most expensive real estate market in the country by a SmartAsset Analysis in June.
The Graves family may finally benefit from recent economic headwinds, which have caused mortgage rates to fall to their lowest points in more than a year.
The Federal Reserve is also expected to initiate its first rate cut in more than four years at its September meeting, a move that would allow banks to offer cheaper loans for homes and cars.
Still, mortgage rates remain elevated: The 30-year fixed rate stood at 6.47 percent as of Aug. 8.
At the peak of the suburban homebuying frenzy in 2020, rates were often below 3 percent.
The Graves said they don’t want to move from Portland, despite knowing that housing is much cheaper in other parts of the country.
“We actually tried to move the kids to a more affordable city and ended up being less happy,” Laura Graves said.
That more affordable city was Spokane, Washington, where the couple grew up.
They lived in Portland for six years before deciding to move back to Spokane in 2018, where they purchased a home with a $2,200 monthly mortgage.
Laura Graves said she and her husband began to miss their jobs in Portland, so when her former supervisor offered to double her pay if she returned, the decision was easy.
They sold their home in Spokane and moved back to the city with their children, who are 7 and 9 years old.
When they first returned, Laura Graves said they were “a little picky” when looking for a home because they didn’t want to overpay for something they didn’t love.
The median home price in Portland is nearly $540,000, making it the 15th most expensive housing market in the country, according to one analysis.
The price for this Southeast Portland bungalow dropped by $10,000 on Monday to $349,900. The 2,200-square-foot condo has four bedrooms and two bathrooms.
In early August, the asking price for this three-bedroom, two-bathroom home in Portland was reduced by $19,000. It is now on the market for $380,000.
Faced with sky-high prices and rising interest rates, they chose to save their money for years, crossing their fingers that they would find the home of their dreams.
Setting aside money for that has come at the expense of their retirement accounts, into which the couple puts just 3 percent of their annual income.
They also face the reality that there is a chronic housing shortage in the city they chose.
According An analysis of housing needs From the city level, Portland will need to build 120,000 new homes by 2045, meaning 5,000 units will be built each year until then.
Unless there is a major change, the city is unlikely to meet this target, as builders were only able to produce 1,483 new units in 2023.
However, Laura Graves said she and her husband will continue to monitor the market to find a home they like and that fits their budget.
“Our kids have started talking about how much they want a house and their own rooms,” she said. “We’ll never get those years back. When we buy one, we won’t even need room for a kid’s playroom.”
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