Portland Home Buyers Strike Again with Plummeted Mortgage Rates
Since sometime in December, mortgage rates have been free falling due to the turmoil in the stock market. The rates used to be in the high 4% and low 5% for a 30 year fixed mortgage in the fourth quarter of 2018. Now I am seeing rates lower than 4.5% for a mixed 30 year mortgage! Not surprisingly, Portland housing market is heating up with this window of opportunities. I have been lots of activities for homes under $425K, unusual for January.
Due to the stock market volatility and the government shutdown, investors are flocking to bonds, causing the bond prices higher with yields becoming lower. When bond yields decrease, so do mortgage rates. The yield on the 10-year Treasury has plummeted from a high of 3.24% in mid December to about 2.7% currently. Will this continue to fall? It will depend on the economy. After the Treasury yield hit the bottom at 2.5%, it is on the upward trend again especially as the US – China trade talks continue. Mortgage rates will continue to face volatility in my opinion because no one really knows how the economy will play out. If the stock market continues to heat up, then the mortgage rates will continue to go up. If we see more slowdowns and recessionary cues, the rates may drop.
As of now, Portland job market is very strong and the metro region has expanded economically and we are continuing to see an increase in population as Oregon is still one of the places people are moving to for a better lifestyle. That means the region is continuing to see higher demands for housing. The problem is that we don’t have enough inventories still. Home builders have lost confidence and we don’t have enough existing homes for sale.
While we do not know exactly what the rest of the 2019 will look like, this lowering mortgage rate has been a spark of optimism in our housing market for both sellers and buyers. If you have been thinking about buying a home in 2019 in the Portland market, you should move rather quickly this year and take advantage of this window of opportunity. The only problem is the low amount of supplies at the moment because we are still in the winter housing market. If you do see some places that you like that are currently for sale, please talk to me. I help a lot of home buyers in the Portland metro region with my top buyer’s agent services.