Mixed Signals in Oregon’s Housing Market
A new statewide survey shows Oregon’s multifamily housing market sending mixed signals: rents are climbing, but so are vacancies. According to Multifamily NW’s biannual Apartment Report, average rents rose 3 percent year-over-year to $2.11 per square foot, while the Portland-Vancouver metro vacancy rate climbed to 5.47 percent, up from 4.49 percent last year.
The report surveyed 460 properties totaling 42,000 units and found that despite economic headwinds, investors are cautiously returning to the market and tenants are absorbing rent increases more steadily than expected.
Investment Activity Rebounds
Multifamily brokers described 2025 as a potential turning point after two years of declining valuations and sluggish transactions.
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“I feel like we’ve kind of hit a bottom for valuation,” said Greg Frick, co-founder of HFO Investment Real Estate and a member of the Apartment Report advisory committee. “We’ve seen a pick-up in investment activity.”
Frick said buyers and sellers are finally finding common ground: “They’ve come up a little, and sellers have come down a little.”
The number of multifamily sales in the Portland metro area rose to 93 transactions in the first nine months of 2025, compared with 80 in the same period of 2024. The total dollar volume surged 55.3 percent to $1.53 billion, while capitalization rates held steady around 6 percent, indicating stable investor expectations.
Shrinking Construction Pipeline
While higher vacancies may ease rent pressure temporarily, limited new construction could push rents higher again next year. Only 2,000 units are under construction, marking the lowest development pipeline since 2011.
That limited supply could buoy rents but will do little to ease the state’s persistent housing shortage, analysts warned.
“Without new inventory, affordability remains a challenge,” said one housing economist at the report’s release event. “We’re keeping the market from collapsing, not fixing it.”
Optimism from City Hall
During the event at the Oregon Convention Center, Portland Mayor Keith Wilson struck an optimistic tone. He cited several projects driving what he called Portland’s “boom loop” — a cycle of investment and revitalization expected to lift the local economy.
Wilson highlighted redevelopment plans for the OMSI district and the Broadway Corridor, rising hotel occupancy rates (up 5% year-over-year), and construction of the James Beard Public Market downtown.
“We are going to build back Portland better right now, with or without the federal government,” Wilson said.
To support housing development, the city is waiving system development charges for three years, expanding video permit inspections, and removing bureaucratic bottlenecks that slow construction. “We will not hold up your dreams in Portland,” Wilson told attendees.
Economic Headwinds and Job Losses
Wilson’s optimism contrasted sharply with the outlook presented by Mike Wilkerson, director of economic research at ECOnorthwest, who warned that Oregon and Washington may already be in a regional recession.
The state has lost 18,300 jobs in the past year — most of them in Multnomah County — making Portland one of only five major U.S. metros experiencing net job loss. “We are very much the exception to the rule,” Wilkerson said.
He also cautioned that both Oregon and the U.S. could face population decline unless federal immigration policy changes. Moody’s Analytics recently estimated the odds of a national recession at 48 percent within the next 12 months.
Rent Burden Persists Despite Investment
Despite billions spent on affordable housing, the share of cost-burdened renters in the Portland metro area has remained unchanged over the past decade. Wilkerson said those programs have merely prevented the problem from worsening. “We would certainly be worse had we not done what we have done,” he noted.
Still, many in the housing industry argue that Portland must attract more jobs and investment to stimulate demand and growth.
“We need to figure out how to be competitive,” Frick said. “As a region, we’ve assumed people will come no matter what — but that’s changed.”
The Road Ahead
Oregon’s multifamily sector is showing early signs of stabilization after years of turbulence, but the path forward remains uncertain. Rising rents amid higher vacancies suggest the market is recalibrating, not fully recovering.
As Portland works to rebuild confidence and address housing shortages, one thing is clear — the state’s economic future and its housing future are now deeply intertwined.
