Portland Mortgage Market Update — October 25, 2024

Remember last week when I predicted rates to be pretty "steady" this week? I couldn't have been more wrong. Rates took a beating on Monday and never quite recovered. Currently we are back where we were in late July, meaning we have lost all rate improvements we picked up prior to the Fed rate cut.

Why was Monday so hard on rates? It is difficult to say. Some outlets are pointing to the "October Effect" which is a theory that stock prices and markets cyclically decline in October. While there have been some epic crashes occurring in October (1929, Black Monday, the 2008 Financial Crisis), historically the market has done better overall each October than not (although it is more like 60/40). Heaping on to the October Effect was more stimulus news out of China which increased global inflationary pressure and concerns about the growth of the US National Debt, which increased by $600 BILLION in just the past 2 months. Investors are now actively shorting (betting against) Bonds due to debt concerns.

Next week brings a lot of news in inflation AND jobs reports. Hopefully these will break in our favor and we can see some market improvements. I know we all have a lot of buyers that have been scared away by these recent rate increases, but now is the time to remind them that rate drops are not permanent and they need to be ready to strike at the next opportunity.