Portland Mortgage Market Update — September 5, 2025

Rates are in RALLY MODE! Let's not bury the lede here, rates are dropping and dropping fast. Currently we are in the LOW TO MID 6's for a standard 20% down purchase, so if you have clients out shopping this is a FANTASTIC weekend to get into contract on a home.

We can thank some anemic jobs reports for this gift of lower rates. Yesterday's ADP report set the stage, showing only 54,000 job gains (vs the expected 75,000). For the past year or so, the ADP report has traditionally shown poorer numbers compared to the BLS report which drops later in the week, acting as a tease for the mortgage market because poor jobs numbers usually equates to lower rates. Today's BLS jobs report finally delivered, showing an increase of only 22,000 jobs and a tick up in the unemployment rate to 4.3%. The slowing labor market sets the stage for a Fed rate cut in 12 days, with the market now betting an 86% chance we see a ¼ point cut and the remaining 14% betting on a ½ point cut. By the end of the year, they are thinking there is a 70% chance rates are at least ¾ points lower than where they are at now.

So should your clients wait for the Fed rate cuts to take place before hitting the market? Absolutely not, for multiple reasons:

• The market already prices these rate cuts in BEFORE they happen. Traders make money on being ahead of the curve, so mortgage rates (to an extent) are reflective of the forecasted rate. • The past couple of Fed rate cuts we have gotten resulted in a spike in mortgage rates. The Fed cuts rates to spur the economy, which usually results in a flight to stocks at the expense bonds • There is a glut of potential homebuyers waiting for rates to drop. When they see the news that the Fed is cutting rates, they will enter the market which will result in more buyer competition, which would result in potential bidding wars. Get in contract now with the home can be bought at a discount compared to what will happen in 3-6 months.