Home News Portland Home Prices Soar in May, Defying Steep Rise in Mortgage Rates

Portland Home Prices Soar in May, Defying Steep Rise in Mortgage Rates

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Home prices in Portland rose 11.7% to a median of $ 575,000 in May, according to RMLS. This is because tight supply tends to offset rising interest rates and cool the real estate market by increasing monthly payments.

The “total market time”, which is the period from the listing of the property to the acceptance of the offer, decreased on May 18th, from April 21st to May 22nd, 2021.

“We are in a very strong seller market,” said Aryne Blumklotz, Principal Real Estate Broker of Living Room Realty. “I don’t have much to buy.”

Blumklotz recently represented a neighborhood seller in Alberta who received nine offers at a home listed for $ 675,000. She held three open houses, all of which were full. She can’t reveal her winning bid because the house isn’t closed yet. A few weeks ago she sold Alameda’s home for $ 995,000, which was listed for $ 869,000.

Still, there are signs that the market may soften. Blumklotz says he’s received more email from other agents about homeowners who are lowering prices. She says it is most likely due to rising mortgage rates.

“Most buyers shop on a monthly basis,” says Blumklotz. When the rates were low, those people were able to grow to borrow more money and still reach their target payments. “Now those people can’t stretch,” says Blumklotz.

The Federal Reserve is raising interest rates at the fastest pace in decades to curb inflation. Higher interest rates make it more expensive to borrow money and cool down the demand for commodities, especially high-priced commodities such as homes.

Related: We asked our financial adviser: Should you break the bank with a big purchase or withhold it?

When the Fed raises rates, economists talk about how central banks are picking up punch bowls. The term is compared to Federal Reserve Chairman William McChesney Martin giving a speech at the Waldorf Astoria Hotel and comparing the central bank to “a chaperon who ordered the punch bowl to be removed when the party really warmed up.” After that, it was used in 1955.

According to the St. Louis branch of the Federal Reserve Board, the average interest rate on 30-year fixed mortgages is about 5.23% today, up from 3.11% in January.

You may grab another punch before the bowl disappears.

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