After what feels like an eternity, the Federal Reserve will announce today a decrease in the overnight rate of at least 25 basis points and potentially 50. Reducing 25 basis points will likely stabilize mortgage markets, with the 30-year fixed-rate conventional mortgage national average this morning at 6.11%. If the Fed chooses a more aggressive drop, I expect mortgage rates to drop below 6% for the first time since August 2022. With expected decreases in the last two Fed meetings of the year, there is little doubt that mortgage rates in the 5% range are coming.
The housing market in Central Oregon isn't strictly following typical seasonal trends this year, and I suspect anticipation over lower rates has had a significant impact. However, while lower rates will help many buyers, there is a strong chance those rates will limit inventory next summer. Home prices are likely to increase if less inventory becomes a reality, along with more affordable mortgages. Our housing market is heavily impacted by winter weather, with significantly fewer transactions during December through February, building towards a peak in mid to late summer. As we approach the end of peak selling season, many properties have reduced the asking price to secure a contract by year-end. Buyers should keep this in mind, as refinancing down the road as rates decline and buying today could produce better results than waiting for lower rates later and competing with more buyers for less inventory.
This morning, there are 1252 single-family homes for sale in Deschutes County, down nine from last week. A somewhat tepid sixty-four homes were placed under contract this week at an average of $816,433. Closed transactions were strong, with seventy-three homes recorded at an average of $891,158. The median days listed in the active inventory are seventy-seven. There is little doubt that opportunities are available in Deschutes County this fall.
In contrast to declining inventory in Deschutes County, Crook County saw an increase of six this week, with 173 single-family homes available. Eleven pending sales, averaging $562,899, are in the high range of recent months. Seven closed transactions, at an average sale price of $667,856, are the highest since June. The median days listed for active inventory in Crook County is seventy-five, close to the Deschutes County number. Two of the sales in Crook County this week went above the asking price, with one at full price and the remaining sales below asking by an average of -3.54%.
Jefferson County inventory increased by two, now at 118 single-family homes listed. Five pending sales are in line with recent weeks at an average of $370,700. There were two closed sales, one at $315,00, listed for $310k, and another at $347,500, listed at $350k.
Changes in the mortgage markets typically slow transactions, whether mortgages get cheaper or more expensive, and that is the case in Central Oregon at the moment. With rates declining, many buyers who have been on the sidelines need time to re-engage with their lenders, secure preapproval, and begin the process of finding a home. The slower market today will likely pick up steam before we settle into the winter months. At the risk of sounding like a skipping record, there are buying opportunities today that are considerably better than we have seen in Central Oregon in some time. When mortgage rates were last below 6% in 2022, the Central Oregon housing market was red-hot. While we might not see such a frantic sales pace in 2025, the conditions driving our market and ~5000 new residents per year in Deschutes County are unlikely to subside.
