Over the last few years, the Central Oregon housing market trends have been strong enough to create consistent market conditions across all three counties. Price increases slowed somewhat when mortgage interest rates increased, but inventory remained low enough to prevent a significant drop in home values. The last two years showed a slowing in sales volume, with available homes for sale increasing significantly this year. While the Fed lowered rates again last week by 25 basis points, mortgage rates this morning are at 7.02% for the national average of a 30-year fixed-rate conventional mortgage. A slowing economy, higher interest rates, and more homes listed for sale have begun taking a toll on the previously steady market. Stability across the three Central Oregon counties has given way to local market dynamics, making the trends in each county unique.
Single-family homes for sale in Deschutes County decreased slightly to 1,062 due mainly to reduced sale activity and new post-election listings. Fifty homes are pending, with fifty-one completed transactions, with the median price reductions of -6.1% and -6.45%, respectively. This week last year, pending and closed sales were forty-three and forty-seven. Last year, mortgage rates were 7.43%, so the slight reduction in rates may account for the slight increase in sales volume. The most noticeable change year over year is in the number of homes for sale, with 792 listings on this week last year. While market conditions may at this time be similar to last year, the faltering economy and increase in homes for sale are beginning to alter the landscape of our market.
Crook County gained listings this week, now at 178, up thirteen from last week. Three pending sales and five closed transactions are identical to this week last year. However, there were only 146 active listings this week last year. Two of the three pending sales in Crook County this week were over $1M, showing a slowing in the activity in lower-priced homes.
Jefferson County's active listings are unchanged from last week at 115. Three pending sales and four closed transactions compare favorably to this week last year when there were only two pending sales and no closed transactions. There were only 78 active listings this week last year, showing a sharp rise in inventory this year.
Despite the Federal Reserve's efforts to bring down interest rates, the mortgage market is moving in the opposite direction due to an increase in yields for the 10-year Treasury. Mortgage interest does not directly correlate with the Fed overnight rate, but typically, Fed rate decreases trickle down to the mortgage markets. Whether mortgage rates begin to fall in line with Fed decreases remains to be seen and will depend on how much bond investors demand higher yields. Government deficit spending will continue with the next administration, and monetizing that debt creates a demand for higher yields from bond investors. Interest rates may concern today's buyers, but more homes are available for sale, and motivated sellers are helping to balance that out.
