Buying a Home in Eugene-Springfield, Part One: What an “Average Buyer” Sees

by Henry Fields

May 8, 2017

Housing costs play an important role in the local dynamics of labor markets. The relative affordability of housing has an impact on competitive wage rates, worker quality of life, and household disposable income. Expensive housing can limit access for certain kinds of workers; purchasing a home can be an especially high burden for young families and workers early in their career.

As a starting point for analyzing Eugene-Springfield housing cost and its impact on the labor market, let’s look at some characteristics of home purchases in the urban center of Lane County. The table uses the average debt load of a Eugene-Springfield homebuyer to estimate the income needed to qualify for a loan on a house at the current median sale price. Special thanks to Mike Herborn at Stepping Stone Mortgage, who helped provide the estimates.
The median price of an area home has been trending upwards consistently since 2011, and has now passed pre-recession peaks. The current median, $250,000, represents an increase of about 7 percent since March 2016, as new housing construction slowly fills the gap left by the recession. Lane County’s prices are above the nationwide median ($196,500), and comparable to other mid-sized Oregon metros like Medford and Salem, but well short of markets like Bend and Portland, which have median home values in the range of $350,000 and higher.

This analysis has several limitations. Using the average debt load and median sale price conceals substantial variation: for example, many homebuyers do not have large outstanding installment loans, such as student loans, lowering the annual income they require to qualify. Different home buyers will have different needs, such as square footage, that affect a home’s price. There are also a variety of loan programs targeted at different income levels and situations that can help buyers qualify based on their needs. The perspective of an “average buyer” is thus a bit of a simplification.

With these limitations in mind, this analysis is useful as a first glance into what the average homebuyer is likely to encounter in the Eugene-Springfield market at the moment. In the next part of this analysis, we will examine the relationship of these costs to the local wages earned in different occupations

For more coverage of housing issues around the state, see:
Causes of the Great Housing Shortage – Josh Lehner, Oregon Office of Economic Analysis
Affordability Availability (Bend) – Damon Runberg, East Cascades Regional Economist
Southwestern Oregon and the Housing Crisis – Annette Shelton-Tiderman, Southwestern Oregon Regional Economist
Rogue Valley Housing, Building, and Affordability – Guy Tauer, Rogue Valley Regional Economist

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