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Buyer’s Corner

Our early 2023 State of The Market is now available. Download now for a comprehensive look at the data and statistics driving the Central Oregon real estate market, and how they affect your buying and selling goals.

In the fall edition of this report, we discussed the percentage of the market made up of cash transactions, first-time homebuyers, and cancellation rates of purchases. Given that many of the trends discussed in that report have remained consistent, we will instead focus on some topics that should really be on buyers’ radars this year to see who they will be competing against and at what cost.


We bring this up in relation to buyers but this can really apply to sellers as well, since this information helps us determine how many people or families may be coming into the market. We have witnessed new households increasing at a rate that hasn’t happened in almost 20 years.

One of the largest factors is that millennials are stepping into the market for the first time. They are going from living with friends or family to purchasing their own homes and currently make up 43% of the buyer market. With the largest share of the roughly 73 million millennials at their peak homebuying years (30-34 years old), economists see this trend holding strong for the next five to seven years. Another reason affecting household formation is the ability to work remotely. As people living in higher rent areas with two to three roommates were given the option of working remotely and living somewhere else on their own, this promoted new household formation. Nationally, it is estimated that 5% of workers were remote prior to the pandemic, but in mid-2020 about 60% of the workforce shifted to remote work. Since then, we have drifted to about 30% of the workforce still working remotely, and this has stayed relatively consistent over the last year (see Chart A). It would appear that the fear of being called back to work is not as widespread as previously thought, and for the time being, this will continue to be a viable option for buyers. 


People often think that Federal Reserve interest rate changes are what drive mortgage rates, but this is not entirely accurate. Mortgage rates are actually very closely correlated with movements in the yield for the 10- year treasury note and there is normally a consistent spread between the two (see Chart B). What we saw at the end of 2022 was that the spread between treasury yields and mortgage rates was higher than it has been in some time. This is very likely because banks are adding a premium to rates knowing that buyers will likely refinance if rates should fall again in the coming year(s). We don’t know if this will be the new norm or if this will come back inline, but without a doubt, the number one thing you can do is talk to your lender in advance and discuss what kind of payment you can afford and what your loan options look like. With things like interest rate buydowns and adjustable rate mortgages, there are options for buying now and protecting yourself against future rate increases. At the same time, if rates drop in the future, you can use a refinance to take advantage of this and lock in a lower rate. If you can afford the payment now, you don’t have to sit on the sidelines, you just need to be aware of your options.

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Our agents write often to give you the latest insights on owning a home or property in the local area.