Mortgage rates improved slightly this week, with yesterday's national average for a 30-year fixed rate at 6.37%, down ~.2%. Sales in Deschutes County remained solid at sixty-five but not as hot as last week's seventy-nine. Inventory increased by the reduced number of sales the previous week, now at 542. Only twenty-five of the sixty-five pending sales reduced the asking price by a median of -4.59%. The median pending sale price was 650k, while the average was $853k.
In Crook County, inventory increased by two, now at 118, while Jefferson County decreased by one to sixty-five. Pending sales in Crook County for the previous week were twelve, surpassed by fourteen pending sales reported on March 8. This volume of pending sales in Crook County exceeded every week of 2022, indicating the continued growth of Prineville and the surrounding communities. Jefferson County had two pending sales the previous week, down from six reported last week.
After reading several analyst reports (at this point, I hesitate to call them experts!), there seems a strong likelihood the Fed will raise the overnight rate another 25 basis points in early May. I suspect Jerome Powell would like to increase even further in his quest to squash the economy and gain control of inflation, but the state of the banking sector will likely force a more tepid response. As I mentioned last week, Powell has no good options, and despite his best efforts, the economy has been remarkably resilient.
Mortgage rates are tied more closely to the 10-year Treasury than Fed market manipulation, but there isn't any question of correlation. That said, I suspect markets are pricing in future Fed action and expecting a pause or pivot in the second half of this year. The housing market in Central Oregon barely took a breath during the fourth quarter of 2022 and the start of 2023 before stepping on the gas again in February. Many buyers expected a steep decline in home prices based on mortgage interest rates near or exceeding 7%, but the descent turned out to be a plateau. While home prices today may not be skyrocketing, strong buyer demand and continued low inventory keep price decreases at bay. Many desirable homes are hitting the market priced correctly and, as a result, are receiving full-price offers.
Considering all the market dynamics, home prices will likely remain firm in 2023. Myriad loan programs are available to address the higher rates, such as temporary rate buydowns, permanent rate buydowns, and even (heaven forbid) adjustable rate mortgages. However, waiting for lower rates will likely also increase home prices, which so far this year have been relatively stable. Now is where I mention (weekly) that housing is best considered a long-term investment! Attempting to time the market is nearly impossible, but rapidly increasing sale prices are more difficult for most buyers to navigate than higher mortgage rates. Plus, with an interest rate buydown, in most cases, your rate will be at least one point lower than the quoted conventional rates. I anticipate a robust refinance market starting in late 2023, as today's buyers potentially have an opportunity to decrease monthly payments and lock into a lower rate. We may look back at this time as the buying window many were seeking as rates decline in the future and demand for homes increases. Although I do not anticipate rates in the three's anytime soon. Adjusting expectations may be required to see today's market clearly.
Recently, many of my readers have taken advantage of the Market Reports on EnjoyBendLife.com to track the market. These reports are updated with the active, pending, and sold information for your chosen zip code, subdivision, or neighborhood every fifteen minutes. In addition, each property listed has a link to photos, maps, and all the necessary information to research our market. Registration is required to access these reports, so you can expect a phone call from me once you sign up! However, if you aren't ready to talk, the Market Trend Reports on my website are available without registering and provide tremendous information about the active inventory. You will not find a more comprehensive set of tools and information on any real estate website for Central Oregon! I am always available to provide a personalized, expert analysis of any community you are considering, and I am happy to work on your timeline. Information is power, and I am always available to share my knowledge. Don't hesitate to get in touch with me with any questions.