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Demand for homes and home prices will continue to stay relatively high in the Greater Portland Metropolitan area despite rising interest rates and inflationary pressures, according to presentations offered by two leading economists at the 2022 HBA Housing Economic Forecast held on November 10 at the Oregon Convention Center. Robert Dietz, NAHB Chief Economist and Josh Lehner, Oregon State Economist, presented economic data from a national and local perspective that highlighted economic trends over the next few years and how the local residential market will be affected. As everyone is aware, the sudden and drastic inflation the US is experiencing is cause for concern, but is not projected to drastically affect home sales in Oregon or the Portland area. For two reasons, first according to Dietz, inflation is expected to fall and flatten out around 2.4% over 2022 and 2023, high compared to the Federal Reserve goal of 2 percent, but nowhere near the October level of 6.2%. And the second reason; with a large deficit and continued underproduction, the demand for housing will continue as the Fed raises interest rates and pulls back on its unprecedented level of bond purchasing. While an increase in interest rates would traditionally slow down demand, the housing deficit in supply and production which Lehner highlighted will counteract that tendency. Lehner referenced the Oregon Regional Housing Needs Analysis, which projects a need of 584,000 new homes in Oregon between 2020 and 2040, with 111,000 attributed to the current underproduction deficit. According to Lehner, the industry needs to produce approximately 30,000 homes a year to stay even with demand. In the Portland Metro region this equates to 295,000 units short with a need to build 14,750 a year. With current production local and statewide, at half that, the demand for housing will stay high in the short term despite other market forces, according to Lehner. During his presentation, Lehner also highlighted HB 2001 and SB 485, both designed to address the housing deficit as well as underproduction by making middle housing easier to build. But, he cautions this is not the silver bullet some had hoped it would be. The event was attended by over 350 business leaders, industry professionals and local elected leaders including Metro Councilors Gerrit Rosentha and Christine Lewis, Clackamas County Commissioner Paul Savas, and from Tigard, Mayor Jason Snider and Councilor John Goodhouse. For more information contact rmakinster@hbapdx.org