Portland's real estate market saw slightly cooler activity in August but overall remains the most productive summer on record. (A slight dip in home sales in August is common as people find more fun things to do!) The volume of homes sold is up 22% this year, and the average price of a Portland home has risen between 6% to 7%.
The supply of houses on the market is also at just 1.9 months of unsold inventory. A more balanced buyer/seller market would have between 4 to 5 months. The low supply of homes for sale continues to put an upward pressure on home prices. It's a great time to sell a house!
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The Federal Reserve is getting closer to increasing short-term interest rates.
In 2008 the Federal Reserve put its benchmark rate close to zero to help boost the economy.
This rate is likely to increase soon as the economy has improved enough to return borrowing costs to more "normal" levels and keep future inflation from accelerating to much. A decision could be announced this week, mid-December, and or March 2016. I've read rate increases will be slow and gradual, with a minimal impact on our home budgets for the first 12 to 18 months. Ultimately, the impact may be felt on future mortgages, credit cards and bank loans. It could be a great time to refinance an existing adjustable-rate mortgage, and or chip away at any variable-rate debt including credit cards, student loans, and home equity lines of credit. For savers, it could signal higher returns on bank balances. Savings account rates could top 1%...whew hew!
How can this impact the housing market?
Projected home sales aren't likely to face any major setbacks due to a gradual rise in interest rates. There may be some volatility in home prices at the start if the media gets carried away, but there are too many other forces driving the housing market including a serious back-log of pent-up demand for housing and extreme low inventories of homes for sale. Home ownership is driven more by need and life events (new job, pay raise, getting married, kids), than by interest rates.
The average cost of a home in the Portland Metro Area is currently $353,200.
Mortgage interest rates are about 4%. Call Brent Schreiber with Consolidated Community Credit Union at 503-872-9455 if you think it’s time to refinance or buy. You’ll be happy with Brent’s experience and commitment to serving his clients.
Call me when it’s time to buy or sell a home. I’ll work hard for you!
Darin Provost, Broker
Portland Digs Real Estate