Weekly Mortgage Rates Drop, Easing Affordability
Mortgage rates fell this week after the chair of the Federal Reserve uttered long-awaited, market-moving words.
"The time has come for policy to adjust," Fed Chair Jerome Powell said Aug. 23 in a speech. Translated from Fedspeak to English, this means, "We're going to cut interest rates soon."
It looks like what we could be at the beginning of a trend for rates to finally cool off and provide some better affordability for our market. This should hopefully be help boost sales and move some of our stagnant inventory along, but it will be interesting to see how seasonality plays into this in the coming months. I think that we will continue to see a decent market farther into the Winter months, compared to what would usually be expected, but it's hard to tell what type of landscape will form for sure.
Right now, things remain to be strange when reviewing the statistics and trends. Homes in Deschutes county that are not selling in the first 90 days are, on average needing to drop from their initial price 12% or more to get under contract. That's quite a spread in seller and buyer expectations! Last month in Bend, the hot price point for volume was 550-600k, with a 17% increase. It could be due to the increase of inventory that came in, but I would attribute it more to the slight decrease in rates, that allowed break in buyers a shot at making a home work for their budget. On the other hand, in LaPine, we are seeing the 550k price point as the most saturated product I've seen in a long time; 17 months of inventory (Bend is about 3 months)! I'll continue to keep you all in the loop. Make it a great week! - Greg
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