The United States Department of Labor reported a record-setting 8.5% 12-month inflation rate earlier this month. As we know, the Central Bank’s playbook for combating inflation includes increasing mortgage interest rates. As of today, April 29th 2022, the 30-Year Fixed Rate Mortgage Average is at 5.10% (source). This movement has many Gorge residents understandably wondering if we’ll start to see housing prices come down in the near future.
While rate increases are undoubtedly putting downward pressure on the market and slowing the rate of application for mortgages, it doesn’t necessarily mean we can expect prices to come crashing down. Many major real estate firms and publications, including Fannie Mae and Zillow, still predict home prices to climb this year. But we may see prices slide in certain markets.
Corelogic, a real estate research company, recently released an assessment of close to 400 metropolitan statistical areas, as reported on by Fortune.com. They categorized housing markets into five sections based on the likelihood that home prices in that market will fall over the coming 12 months. Here are the categories:
- Elevated: Over 40% chance of a price dip
- High: 30–40% chance
- Medium: 20–30% chance
- Low: 10–20% chance
- Very Low: 0–10% chance
Corelogic surveyed 392 regional housing markets and came up with the following breakdown:
- Elevated: 2%
- High: 1%
- Medium: 10%
- Low – Very Low: 86% of markets
Interestingly, four of the markets identified in the high to elevated categories were in the Pacific Northwest: Mount Vernon, WA.; Olympia, WA.; Salem, OR. (elevated) and Bend, OR. (high).
The Columbia Gorge was not one of the specific markets included in the study, however, some local markets they did cover, and their associated likelihood of prices decreasing, were:
- Portland, OR – Vancouver, WA: Low
- Kennewick-Richland, WA: Very Low
- Walla Walla, WA: Very Low
These regional local market assessments, paired with ongoing high demand, gives us good reason to believe that we will not be seeing a price decrease in Hood River, White Salmon, the Dalles and surrounding Columbia Gorge areas. “There is still a very strong buyer demand, especially in the Columbia Gorge. So if you’re looking to buy, I wouldn’t count on waiting for a price decrease,” advises Jen Dillard, principal broker at the Jen Dillard Team, affiliated with The Hasson Co. “Don’t be too quick to compare what’s happening to the housing market bubble 15 years ago. These rises are not based on those same factors of loose lending practices and investor speculation. If anything, with rates rising, I would encourage people to buy sooner than later.”
We know it can be tough to navigate this challenging housing market, but we are here to answer your questions and help guide our clients through the process. We also have a stellar network of vetted and trustworthy local lenders. If you have any questions or would like to work with us, we’d love to hear from you, please contact us.