One drawback to a Federal annual deficit of two trillion dollars is the need to monetize the debt through government bonds. Bonds sell in an auction format, and investors will only purchase the bonds if the yield makes sense in our inflationary economy. As the auctions wind down, bond yields rise if investors don't step up, and that rise in yields trickles down to financing costs in the form of car loans, credit card interest, and mortgage interest, to name a few. Mortgage interest rates closely follow the 10-year Treasury, which is at 4.009% this morning, with the average rate on a 30-year fixed-rate mortgage at 6.62%. With mortgage rates at 6.14% just several days ago, home buyers feel today's rate sharply. As expected, home sales slowed with higher rates, and inventory decline is sluggish. Add in our typical seasonal taper towards the winter months, and the stats for this week in Central Oregon make perfect sense.
This morning, there are 1173 single-family homes for sale in Deschutes County, just one less than last week. A modest sixty-one pending sales at an average of $934,272 and sixty-one days on the market indicate less buyer activity than the previous several weeks. Fifty-four homes closed this week at an average of $1,040,460 and fifty-four days on the market. The sold-to-original price ratio was 93.81%, another indicator that sellers are taking steps to attract buyers.
Inventory in Crook County has shown resistance to decline, increasing by one from last week to 181. Five pending sales, at an average of $796,780, and nine closed transactions, at an average of $767,866, are consistent with the last several weeks. The average days the pending and closed sales were listed were seventy-three and twenty-five, respectively. Crook County's sold-to-original list ratio remains steady at 97.06% for the week, indicating a resilient housing market in the county.
In Jefferson County, inventory is flat from the previous week at 118. Five pending sales, at an average of $549,240 and 103 days listed, are typical for a week in the county. Three closed transactions, averaging $353,233 and 120 days listed, were also in line with the previous several weeks.
At this point, it is impossible to predict what the Fed might do with rates at the November meeting. The economic situation is complex, and it is becoming increasingly evident that the last aggressive rate decrease was politically motivated. And please spare me the narrative about the Fed not being political! With inflation picking up steam and recessionary, stagnant economic indicators flashing red, the Fed is between a rock and a hard place.
When steady rate decreases from the Fed seemed likely, it was reasonable to expect a flood of buyers to enter the housing market, excess inventory to decline, and home prices to remain firm. Unfortunately, even with Fed decreases, the bond markets can derail some mortgage interest rate "good times". Overall, the Central Oregon housing market is stable. But predictions about what comes next depend on expected market conditions to come to fruition. As data comes in and economic policies unfold, I will continue reporting on our housing market in real-time.
