August 2023- Market Update
Happy August! I am here to provide you with insight that will help you make informed decisions as a home buyer or seller. Bend's market continues to exhibit strength and vitality. Last month Bend's market set another record high with a median sales price of $800k. Of the 141 sales in July, 29% of them were cash and 46 sales (nearly 32%) sold for more than $1M.
Current Mortgage Rate Trends
It's important to understand that inflation and interest rates go hand-in-hand. When the rate of inflation is too high, the Federal Reserve takes action by raising the key interest rates. Borrowing money becomes more expensive which in turn should have the effect of bringing inflation down. Currently inflation is hovering right around 3% down from 4% in May and a high peak of 9.1% in June of 2022. The current rate is the lowest it's been since March 2021, but it's still higher than the Federal Reserve's target rate of 2%
The average mortgage rate for a 30-year fixed is 7.12%, nearly double its 3.22% level in early 2022.
The average cost of a 15-year, fixed-rate mortgage has also surged to 6.55%, compared to 2.43% in January 2022.
In the current environment, ARMs might be more affordable than those with fixed rates. The latest average for a 5/1 ARM was 6.04%.
Experts do seem to be in agreement that rates will come down, but their is not a clear consensus as to when this will occur. According to a Forbes article, mortgage rates will decline over the course of the next two to three years as the rate of inflation declines and hopefully gets to the Fed target of 2%.
If you are waiting for the mortgage rates to drop to buy or sell your home, it can be a better choice to make moves now and refinance later. Here's why:
1. Low inventory - If inventory remains low the competition of buying a home will only increase if/when rates drop.
2. Real estate values appreciate in the long run. So even if values rise and fall in the short term, you'll face higher prices down the road if you wait.
3. If you move now you'll start building equity. Pay yourself and not someone else.
How is the Bend Real Estate Market?
Another record for Bend with the median sales price reaching $800,000.
The average number of days on the market went down from 13 to 9 days- this indicates a high demand.
Our months of supply (inventory) has held steady at 2 months.