Th e Obama Administration’s Eff U.S. Department of Housing and Urban Development | Office of Policy Development and Research orts to Stabilize the Housing Market and Help American Homeowners | June 2013

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on the Housing Market in the Portland-Vancouver-Hillsboro, OR-WA MSA | Page 1

Spotlight on the Housing 

Market in the Portland-VancouverHillsboro, OR-WA MSA

The Portland-Vancouver-Hillsboro, OR-WA Metropolitan Statistical Area (Portland) is located on the border of Oregon and Washington in the 

western part of the states and includes fi ve counties in Oregon and two counties in Washington. The foreclosure crisis in the Portland MSA 

developed later and differently than in many areas of the nation. Home price appreciation during the housing bubble started and peaked more 

than a year later in Portland than nationally, and although home prices rose less steeply, their decline was nearly as sharp. Falling property values 

and the resulting underwater mortgages were partially fueled by investor speculation and excess housing construction in the years leading up 

to the housing crisis. Rising defaults due to unsustainable mortgage lending and rising unemployment during the subsequent recession added 

further to the decline in property values. Aided by a strong economy, the share of distressed mortgages in the Portland MSA-- those 90 or 

more days delinquent or in the foreclosure process--actually declined from 2003 through 2006, whereas, comparable shares in the rest of the 

nation generally remained fl at or increased slightly. When the rapid rise of distressed mortgages in the nation began in 2007, the share of 

distressed mortgages in Portland soon followed suit. As with the nation, rapid increases in local mortgage distress continued in 2009 with the 

downturn in the economy, but the share has remained below the national rate. Economic and housing market conditions in the Portland MSA are 

improving, but the foreclosure crisis has taken its toll. The Administration’s broad approach to stabilize the housing market has been a real help to 

homeowners in Portland and surrounding cities. This addendum to the Obama Administration’s Housing Scorecard provides a summary of trends 

and conditions in the local economy and the impact of the Administration’s efforts to stabilize the housing market and help local homeowners. 

Population Growth, Employment, 

and Housing Market: 

With 2.2 million people according to the most recent 

Census, the Portland MSA is the 23rd largest in the 

nation. From 2000 to 2010, the population increased by 

an average of 29,800 people, or 1.5 percent a year. In 

addition to natural population growth (births minus deaths), 

53 percent of the population increase was the result of 

people moving to the area. Over the last decade, an 

average of 15,900 people per year moved to Portland, 

with this number increasing to 19,100 per year during the 

economic expansion of 2004 to 2008.

During the decade spanned by the Census, new housing 

production exceeded household growth in the Portland 

MSA. Net annual housing unit growth of 1.7 percent was 

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Household Growth During the Past Decade

Date of Census 4/1/2000 4/1/2010

WŽƌƚůĂŶĚD^WŽƉƵůĂƟŽŶ 1,927,883 2,226,009 

 Annual Growth Rate - 1.5%

Portland MSA Households 745,531 867,794

 Annual Growth Rate - 1.6%

Portland MSA Housing Units 790,876 925,076 

 Annual Growth Rate - 1.7%

Source: Census Bureau (2000 and 2010 Decennial)

greater than the corresponding population and household growth rates of 1.5 

and 1.6 percent, respectively. This excess construction, while not as great as in 

some parts of the nation, nevertheless contributed to an oversupply of housing. 

According to the Census Bureau, the number of vacant units increased by an 

average of 1,200 units, or 2.6 percent annually during the 2000s, compared 

to a 4.4-percent national increase. The excess supply of housing is likely to 

have infl uenced the sharp decline in house prices that began in 2007. Investor 

speculation was a factor in the overbuilding in the years leading up to the 

housing crisis, as a large share of Portland area home purchases were by 

non-occupant investors. Specifi cally, from 2000 to 2006 investor home sales 

rose from 7.2 to 15.1 percent of total sales in Portland while the corresponding 

increase for the nation was from 7.8 to 14.6 percent of sales. As reported 

by the Oregonian, another cause of overbuilding in Portland was speculative 

construction of condominiums in and around the central business district. 

From 2000 through 2007, approximately 50 projects consisting of 6,100 

condominiums were built and by 2008, the excess supply of condominiums 

on the market resulted in the conversion of 900 planned condominiums to 

apartments. Subprime lending also contributed to the overbuilding in Portland. 

A study by the National Bureau of Economic Research indicates that in 2005, 

Portland ranked 37th out of the top 107 metropolitan areas with the highest 

share of subprime mortgage originations relative to housing units. In addition, 

a conservative estimate based on HMDA (Home Mortgage Disclosure Act) data 

indicates that subprime originations tripled nationally between 1998 and 2005. 

According to a study by the Center for Responsible Lending, approximately 90 

percent of subprime mortgages experience increases in monthly payments of 30 

to 50 percent within a few years, causing subprime loans to typically default at 

more than 7 times the rate of other mortgages.
Th U.S. Department of Housing and Urban Development | Office of Policy Development and Research e Obama Administration’s Eff orts to Stabilize the Housing Market and Help American Homeowners | June 2013

U.S. Department of the Treasury

Spotlight on the Housing Market in the Portland-Vancouver-Hillsboro, OR-WA MSA | Page 2

An economic recovery is underway in Portland.

The local economy grew fairly rapidly after the 2001 

recession, with nonfarm payrolls increasing at an average 

annual rate of 23,350 jobs, or 2.5 percent, from the 

third quarter of 2003 through the fi rst quarter of 2008, 

compared with a national increase of 1.3 percent 

over the same period. The impact of the 2007-2009 

Recession was more severe on Portland than for the 

nation. Jobs in the Portland MSA declined at an average 

annual rate of 46,350, or 4.4 percent, from the second 

quarter of 2008 through the end of 2009, compared 

with a national annual decline of 3.5 percent over the 

same period. Recovery from the Great Recession has 

been slightly stronger in Portland, with jobs increasing 

at an average annual rate of 15,500, or 1.6 percent, 

from the fi rst quarter of 2010 through the fi rst quarter of 

2013, compared with a national rate of 1.3 percent. 

The Portland MSA is known for its diverse local economy. 

During the recent recession, job losses were severe in the 

construction and manufacturing sectors, which declined at 

average annual rates of 13.1 and 8.2 percent, respectively; 

declines also occurred in fi nancial activities (4.8 percent), 

and professional and business services (-4.6 percent). 

The professional and business services and manufacturing 

sectors have led the recovery in the Portland economy, 

growing at average annual rates of 3.2 and 2.0 percent, 

respectively, with education and public health (1.6 percent) 

and the leisure and hospitality sector (1.5 percent) also 

contributing to the expansion. Growth in these sectors have 

more than offset average annual job losses in construction 

(-1.6 percent), government (-0.5 percent), and fi nancial 

activities (-0.4 percent). The unemployment rate for the 

Portland MSA peaked at 11.1 percent in May 2009 

and has since fallen to 7.3 percent as of May 2013. The 

national unemployment rate peaked in October 2009 at 

10.0 percent, falling to 7.6 percent by June 2013.

Existing and new home sales in the Portland MSA 

began a dramatic decline in 2005 but stabilized 

in 2009, and a recovery took hold in 2012. After 

reaching a peak of 59,300 units sold in 2005, existing 

home sales dropped by an average annual rate of 19 

percent between 2006 and 2008. Existing home sales 

stabilized from 2009 through 2011 and began to rise in 

2012, increasing at an average annual rate of 16 percent 

(albeit on a low base) and reaching a pace of 29,700 

homes sold. New home sales also peaked in 2005 at 

12,125, before falling between 2006 and 2011 by an 

annual average of 13 percent. New home sales increased 

by 7 percent in 2012 to 3,000 homes sold.

Portland MSA house prices rose later and 

somewhat less steeply than for the nation during 

the housing bubble. The CoreLogic repeat-sales 

house price index (HPI) shows that during the housing 

bubble, home prices increased at close to 90 percent of 

the national rate in Portland and peaked more than a year 

later. However, house prices fell by 29 percent from their peak in July 2007 to 

their low in April 2011, nearly the same as the national peak-to-low decline of 

31 percent. A relatively high level of distressed sales (involving bank-owned 

properties or short sales) played a role in the price decline in the Portland MSA, 

as distressed sales—at 22 percent of existing home sales during this period—

were close to the 25 percent national rate. In the last 12 months, the share 

of distressed sales averaged 25 percent in Portland compared to 24 percent 
Th U.S. Department of Housing and Urban Development | Office of Policy Development and Research e Obama Administration’s Eff orts to Stabilize the Housing Market and Help American Homeowners | June 2013

U.S. Department of the Treasury

Spotlight on the Housing Market in the Portland-Vancouver-Hillsboro, OR-WA MSA | Page 3

nationally. The rise in house prices in Portland during the 

bubble was likely spurred by investor speculation, as home 

sales to investors averaged 13.8 percent during the upturn 

in the bubble-—slightly higher than the 13.2 percent share 

for the nation. As described earlier, subprime lending is 

also likely to have spurred demand and fueled home prices. 

Home prices in Portland have since bounced back by 

16 percent from their 2011 low, outpacing a 12 percent 

national increase in prices since the end of the bubble. 

The Portland rental market continues to be tight 

despite increased apartment construction activity. 

According to Reis, Inc., the Portland-Vancouver-Hillsboro 

apartment vacancy rate was 4.7 percent in the fi rst quarter 

of 2013, down from 4.9 percent a year earlier, representing 

tight market conditions. The slight decrease in the vacancy 

rate occurred despite the large number of new apartment 

projects entering the market during the past year; the 

demand for rental units has been especially strong in innercity Portland. The national apartment vacancy rate declined 

from 6.3 to 5.8 percent over the same period. During the 

fi rst quarter of 2013, the average apartment rent in the 

Portland MSA increased by 9.6 percent from a year ago 

to $1,006; the average rent nationwide increased by 4.0 

percent to $1,080 during the same period. 

Trends in Mortgage Delinquencies 

and Foreclosures: 

Portland homeowners continue to struggle with high rates of 

mortgages at risk of foreclosure. According to LPS Applied 

Analytics, as of April 2013, Portland placed 176th out 

of 381 metropolitan areas ranked by share of mortgages 

at risk of foreclosure (90 or more days delinquent or in 

the foreclosure process). LPS data show that mortgages 

at risk of foreclosure decreased by 19 percent during the 

last year in the Portland MSA to 15,650 by April 2013, 

compared with a national decline of 26 percent during the 

same period. CoreLogic data since 2000 indicate that 

the rate of mortgages at risk of foreclosure in the Portland 

MSA have been consistently below the national rate, with 

the gap starting to widen in 2003. Mortgages at risk of 

foreclosure in the Portland MSA actually declined from 1.3 

to 0.6 percent between 2003 through 2006, when the 

average share of distressed mortgages for the nation had 

remained steady or increased slightly. In 2007, when the 

foreclosure crisis began for most of the nation, mortgages at 

risk of foreclosure in the Portland MSA followed the national 

trend but had a signifi cantly smaller share of mortgages in 

distress—rising from 0.6 percent in December 2006 to 2.3 

percent by the end of 2008 compared with a rise of 1.6 

percent to 4.4 percent nationally. In 2007 and 2008, singlefamily foreclosures were largely driven by unaffordable loan 

products. Beginning in 2009, foreclosures were increasingly 

driven by loss of income, unemployment, and strategic 

defaults as the economy worsened according to research by 

the Federal Reserve Bank of Chicago. A sharp spike upward 

in the rate of distressed mortgages occurred in 2009 for both Portland and the 

nation. By early 2010, mortgages at risk of foreclosure reached a peak of 8.0 

percent nationally, and have since fallen to 5.6 percent. The share of distressed 

mortgages in the Portland MSA reached a much lower peak of 5.4 percent in 

early 2010 and has since fallen to 4.8 percent as of March 2013. 
Th U.S. Department of Housing and Urban Development | Office of Policy Development and Research e Obama Administration’s Eff orts to Stabilize the Housing Market and Help American Homeowners | June 2013

U.S. Department of the Treasury

Spotlight on the Housing Market in the Portland-Vancouver-Hillsboro, OR-WA MSA | Page 4

Realty Trac data indicate that the foreclosure completion 

rate in the Portland MSA has been comparable to the 

national rate. As of May 2013, the number of foreclosure 

completions as a percent of all housing units in Portland 

since April 1, 2009 is 2.7 percent compared to a national 

rate of 2.6 percent. Foreclosure completions have been 

trending downward nationally and in the Portland metro 

area. For the fi rst quarter of 2013, completed foreclosures 

in Portland were down 57 percent from one year ago, 

while completed foreclosures in the nation fell by 25 percent 

during the same period. 

For the fi rst quarter of 2013, the rate of foreclosure 

completions in Portland was 0.06 percent compared to a 

national rate of 0.11 percent. This lower foreclosure rate 

is likely the result of successful lawsuits against lenders for 

improper foreclosure procedures and a decision by the 

Oregon Court of Appeal’s in July 2012 that ruled against 

most non-judicial foreclosures (see Realty Trac’s May 2013 

Foreclosure News Report), which have caused foreclosure 

completions to drop dramatically in Portland in the last two 

quarters. The impact of recent legislation on foreclosure 

procedures in Oregon is uncertain, however. In June 2013, 

Oregon’s Supreme Court partially reversed the Court of 

Appeals July 2012 decision and reinstated non-judicial 

foreclosures in certain cases. 

The efforts of numerous state and local entities and fi nancial 

institutions in partnership with the federal government have 

helped contain the rate of foreclosures. Lender processing 

delays and a lengthy judicial process have also contributed 

to the national decline in foreclosure activity. In the wake of 

the February 2012 National Mortgage Servicing Settlement, 

foreclosure activity has started to pick up a bit, primarily in 

states where the process slowed dramatically in the last two 

years. CoreLogic reports that 11.7 percent of mortgages in 

the Portland MSA were underwater as of the fi rst quarter of 

2013—far lower than the 19.8 percent nationally—but still 

representing additional homeowners potentially at risk.

Th e Administration’s Eff orts to Stabilize the 

Portland MSA Housing Market: 

The Administration’s mortgage and neighborhood assistance programs 

-- the Home Affordable Modifi cation Program (HAMP), the Federal Housing 

Administration (FHA) mortgage assistance programs, the Neighborhood 

Stabilization Program (NSP), and the Hardest Hit Fund (HHF) program –

combined with assistance from the HOPE Now Alliance of mortgage servicers 

and the National Mortgage Servicing Settlement have helped stabilize the 

Portland MSA housing market.

From the launch of the Administration’s assistance programs in April 2009 

through the end of April 2013, nearly 35,000 homeowners received mortgage 

assistance in the Portland metropolitan area. Nearly 17,600 interventions were 

completed through the HAMP and FHA loss mitigation and early delinquency 

intervention programs. An estimated additional 17,400 proprietary mortgage 

modifi cations have been made through HOPE Now Alliance servicers. While 

some homeowners may have received help from more than one program, 

the number of times assistance has been provided in the Portland MSA is 40 

percent greater than the number of foreclosures completed during this period 

(25,100). Under the landmark National Mortgage Servicing Settlement, 

nearly 7,000 Oregon homeowners had benefi tted from over $450 million in 

refi nancing, short sales and completed or trial loan modifi cations, including 

principal reduction on fi rst and second lien mortgages provided as of March 

31, 2013. In Washington, more than 15,000 homeowners had benefi ted from 

over $1.2 billion in consumer relief. Nationwide, the settlement has provided 

more than $50 billion in consumer relief benefi ts to more than 620,000 

families. That is in addition to the $2.5 billion in payments to participating 

states and $1.5 billion in direct payments to borrowers who were foreclosed 

upon between 2008 and 2011.

Given over three rounds, the Neighborhood Stabilization Program

has invested $7 billion nationwide to help localities work with non-profi ts and 

community development corporations to turn tens of thousands of abandoned 

and foreclosed homes that lower property values into homeownership 

opportunities and the affordable rental housing that communities need. 

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Foreclosure 

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Foreclosure

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Foreclosure 

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Portland MSA 550 0.06% 25,230 2.7%

EĂƟŽŶ 139,100 0.11% 3,392,100 2.6%

Note: Foreclosure Rates as Percent of All Housing Units; 

Data through May 2013 for foreclosures since April 2009 

Source: Realty Trac and Census Bureau
Th U.S. Department of Housing and Urban Development | Office of Policy Development and Research e Obama Administration’s Eff orts to Stabilize the Housing Market and Help American Homeowners | June 2013

U.S. Department of the Treasury

Spotlight on the Housing Market in the Portland-Vancouver-Hillsboro, OR-WA MSA | Page 5

NSP1 funds were granted to all states and selected local 

governments on a formula basis under Division B, Title III of 

the Housing and Economic Recovery Act (HERA) of 2008; 

NSP2 funds authorized under the American Recovery and 

Reinvestment Act (the Recovery Act) of 2009 provided 

grants to states, local governments, nonprofi ts and a 

consortium of nonprofi t entities on a competitive basis; and 

NSP3 funds authorized under the Dodd–Frank Wall Street 

Reform and Consumer Protection Act of 2010 provided 

neighborhood stabilization grants to all states and select 

governments on a formula basis.

In addition to stabilizing neighborhoods and providing 

affordable housing, NSP funds have helped save jobs. 

Each home purchased, rehabilitated and sold through the 

NSP program is the result of the efforts of 35 to 50 local 

employees. 

Overall, a total of $31 million has been awarded to the 

State of Oregon through NSP1, NSP2, and NSP3. Of 

this, $10,681,706 has been expended to recipients in 

the Portland MSA. The State of Washington was awarded 

a total of $33 million through NSP1 and NSP3 and the 

State has expended approximately $2,397,160 in the 

Portland metropolitan area. Approximately 127 households 

in Portland have already benefi ted from NSP, and 

activities funded by the program are expected to provide 

assistance to an additional 163 owner-occupied and renter 

households. Examples of how these funds have been put to 

use are provided below. 

• The City of Portland and Multnomah County

received a total of $3,255,160 in NSP1 funds and 

$787,409 in NSP3 funds. The City and County’s 

NSP programs have focused on providing homebuyer 

assistance through down payment, closing cost, and 

rehabilitation assistance loans. To date, 17 households 

have received these loans, four of which were female 

headed households. The City of Portland and Multnomah 

County partnered with, Proud Ground, a local land trust 

to create permanently affordable housing through the 

purchase and rehabilitation of foreclosed homes; to date, 

eleven households have benefi tted from this program. 

The City and County used some of the NSP funds to 

partner with Habitat for Humanity in Portland, which 

purchased foreclosed property and built 45 condos on 

the land. Thirteen of the condos have already been sold 

to buyers with income at or below 50 percent of median 

income in the area. 

• Clackamas County received $2,229,334 in NSP1 funds and $997,347 

in NSP2 funds. The County has used some of these funds to assist 

households through down payment, closing costs, and principal write-down 

assistance and rehabilitation loans. Twenty-fi ve households have already 

benefi tted from this program. The County has also used these funds to 

purchase, rehabilitate, and sell homes to buyers through a community land 

trust (CLT). The CLT retains ownership of the land and sells homes on the land 

to low-income homebuyers, who lease the land from the CLT under a 99-

year contract; this arrangement insures the future affordability of the homes 

when there is a change in ownership. To date, nine homebuyers have 

been assisted through this program. A tenth structure was purchased and 

rehabilitated by a nonprofi t and converted into a 5-unit building for very low 

income persons with disabilities. 

• Washington County received $2,420,807 in NSP1 funds and $904,807 

in NSP2 funds. The County used NSP1 funds to provide homebuyer 

assistance and loans for rehabilitation, and partnered with a local non-profi t 

to acquire and rehabilitate homes for income-qualifi ed buyers. So far, 19 

households have benefi tted from these programs. NSP2 funds have been 

used by the County to provide homebuyer assistance and to create rental 

properties through a local non-profi t, with an additional 8 households 

benefi tting from these programs.

• The City of Vancouver and Clark County, WA received a total of 

$2,397,160 in NSP1 funds. The City and County partnered with nonprofi ts 

to purchase and rehabilitate abandoned and foreclosed properties with the 

NSP funds. The City and County also worked with the Vancouver Housing 

Authority (VHA) to recover a large foreclosed parcel within the city limits. 

With the help of a number of different funding sources, this parcel is now 

being developed by the VHA to provide over 100 units of much needed 

low and moderate income, multi-family rental housing. The City and County 

also partnered with the local nonprofi t, SHARE, to purchase and rehabilitate 

rental property and to provide group homes to homeless veterans and 

individuals struggling with substance abuse.

The Administration allocated $220 million from its Hardest Hit Fund to the 

state of Oregon. The Oregon Department of Housing and Community Services 

administers these Hardest Hit funds through the Oregon Homeownership 

Stabilization Initiative (OHSI), which was launched in December 2010. 

OHSI provides several programs to assist Oregon homeowners who are at 

high risk of default or foreclosure. These programs include: the Home Rescue 

Program (unemployment and reinstatement assistance), the Rebuilding American 

Homeownership Assistance Pilot Program, and the Loan Refi nancing Assistance 

Pilot Project. Under the Home Rescue Program, OHSI provides the lesser of 12 

months of mortgage payment assistance or $20,000 to qualifi ed borrowers; 

they also bring delinquent mortgages current if homeowners are no more than 

$10,000 behind on their payments.

Available in Crook, Deschutes, Jackson, Jefferson, and Josephine Counties, 

the Loan Refi nancing Assistance Pilot Project uses HHF funds to purchase 

underwater loans at a discounted price to refi nance and lower mortgage 

payments () 35% of monthly income). The Rebuilding American Homeownership 

Assistance Pilot Program provides funds to assist underwater Multnomah County 

homeowners to refi nance into a new loan with lower monthly payments and 

permit them to rebuild equity faster than their existing payments will allow. As of 

the fi rst quarter of 2013, the most recent quarter for which data are available, 

OHSI had assisted 7,787 homeowners, with more than 80 percent of program 

funds already spent or committed. For additional information, see 

http://www.oregonhomeownerhelp.org/.

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Homeownership assistance to low-and moderate income 55 41

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Homeownership assistance to low-and moderate income 16 16

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