Today, all expectations point towards the Federal Reserve lowering the overnight rate, most likely by 25 basis points. This morning, the national average for a 30-year fixed-rate conventional mortgage is 6.13%, the lowest since rates hit 6.11% in early September last year. Jerome Powell and the Fed governors have consistently said they plan another cut at the last meeting of the year in December. While I do not expect rates to dip much after today's Fed announcement, by year-end, there is every likelihood that the average conventional mortgage rate will be below 6%.
If prices remain stable, there is no argument that lower rates will help buyers and, in turn, sellers. However, in healthy markets, lower rates increase competition, reduce inventory, and put downward pressure on prices. The keyword here is "healthy." Lately, I have read a lot about the housing affordability index and the broader concerns about the economy. Whether the market is shifting remains to be seen. If inventory levels of homes in Central Oregon remain elevated through winter and build rapidly in the spring, despite lower mortgage interest rates, it could be an indicator of the overall economy changing.
This morning, in Deschutes County, the inventory of single-family homes decreased by 14 to 1,241. Pending sales remain stable, albeit less than in the past several weeks, at 59. The average pending sale price was $871,529, and 35 of those listings reduced the price before securing a buyer. Fifty-three transactions closed this week at an average of $852,513, with 28 of those listings reducing the list price by 6.55% before securing a buyer. Thirty of the closed transactions negotiated a price below the list price, with the standout price drop initially listed at $3,295,000 and closing at $2,700,000, a 18% decrease. The sold-to-original list price ratio this week was 93.5%.
Inventory in Crook County this week decreased by five to 212 active single-family listings. Pending sales are on pace with the past several weeks, with eight, averaging $419,075. Seven transactions closed, averaging $638,571, with the average price reduction before securing a buyer at $5.5%. The sold-to-original list price ratio was 95.3%.
For the second consecutive week, Jefferson County inventory increased, this week by five to 135 active listings. For reference, the inventory high this year occurred on August 20 at 144. Pending sales remain stable with five this week, averaging $354,180. There were six closed transactions this week, averaging $344,533, with the average price reduction at 7.78%. The sold-to-original list price ratio this week was 93.1%.
Increased inventory across Central Oregon this fall could be an early indication of a market shift. While mortgage interest rates have decreased, the reduction occurred too late in the selling season to have a substantial impact this year. Inventory trends over the next few months will paint a picture of what to expect from the spring market. If inventory increases and sales are sluggish this spring, it will create competition among sellers and put downward pressure on prices. Conversely, if lower interest rates motivate buyers, and inventory levels remain low, prices will firm up. Whatever the 2026 market holds, there is no question that conditions today favor buyers more than at any time in the past several years.
Sign Up for the Central Oregon Market Report
Sign Up for the Central Oregon Luxury Market Report
