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A home for sale in North Portland with a "sale pending" sign.

(Elliot Njus/The Oregonian)

The Portland area's rapidly rising home prices may have run out of steam in the second half of 2016.

From August through November, home-price gains in the Portland area have matched or trailed the national average, according to the S&P CoreLogic Case-Shiller home price index. Portland until August handily and reliably topped national gains, and even led the 20-city index in year-over-year price increases for the better part of a year.

Prices continue to rise, albeit at a less breakneck rate. The sudden slowdown might be a sign the Portland metro area, walloped by escalating prices in recent years, has hit the outer limits of affordability.

Portland-area home prices rose 0.2 percent in November, on par with the national index. That put prices at a level 10.1 percent higher than a year earlier. Its annual growth was second only to Seattle's 10.4 percent.

The Case-Shiller index measures relative changes in home prices using repeated sales of the same homes. It uses a three-month rolling average.

Aaron Terrazas, a senior economist at the real-estate website Zillow, said that recent months have brought a sea change in the Portland market. Though Portland's central city once saw the strongest home-price growth, its suburban communities saw prices climb faster in November and December.

"Shoppers are becoming a little more price sensitive, even in the most expensive parts of the metro" area, Terrazas said. "We do expect home values' appreciation to slow down. That's probably healthy for the housing market."

Demand for homes has stayed strong, even as the number of listings remains thin. That's helped keep prices rising.

Michelle Maida, a managing broker with John L. Scott Realty in Portland, said the market appears to be bouncing back in recent days after a snow and presidential election slump.

"We had three listings just in the last week, all sold within 12 hours with more than one offer," Maida said. "It's the first time we've seen that in a couple of months."

Borrowing costs have also climbed. The average mortgage rate is up nearly half a percentage point since November, according to Bankrate.com. Concerns that rates might jump higher might have potential buyers scrambling to put offers on what they can afford now, before their buying power is further diminished.

That prospect helped push Peter Schuyler of Portland off the fence. He and his wife bought a home in Northeast Portland last week. They had been working with a mortgage broker just after the Nov. 8 election, when rates spiked.

"We figured getting in now and getting a locked rate would be better than dealing with the uncertainty of the housing market," he said.

A University of Michigan consumer sentiment survey found consumers are increasingly confident that mortgage rates will climb, and 1 in 5 believe it's best to borrow now in anticipation of future rate increases. That's the highest rate in 20 years.

"Further gains in personal income and employment may increase the demand for housing and add to price pressures when home prices are already rising about twice as fast as inflation," said David Blitzer, the chairman of S&P's index committee.

Despite the recent slowdown, the long and steady climb of home prices can still cause sticker shock for would-be buyers.

"There as a little magical thinking on our part," Schuyler said. "Everything sounds overpriced. But I guess it's just the demand that exists in the market."

-- Elliot Njus

enjus@oregonian.com

503-294-5034

@enjus