Portland Mortgage Market Update — June 26, 2026

This was the most encouraging week for rates since the Iran War began. Oil prices collapsed, the Strait of Hormuz looks like it will be open for business, and the Fed's favorite inflation gauge may have peaked. With the signing of the "Memorandum of Understanding," traffic started moving in the Strait which allowed oil prices drop to near pre-war levels and rates followed. Now, we rates aren't quite where we were before the conflict, but we are definitely trending in the right direction and tearing through various technical levels of resistance.

But I read inflation hit a new high this week? And rates are falling? Yes, the (past) Fed's preferred gauge of inflation did hit high it hasn't seen since October of 2023, however with oil prices coming down this news was nary a blip on the radar. The market is assuming that inflation will be trending downward going forward which reduces the Fed's likelihood of increasing interest rates. Plus, this new Fed under Kevin Warsh may be shifting to a different gauge called the "Trimmed Mean" inflation report. This basically takes the same PCE numbers but removes the top 31% and bottom 24% of inflation measures to remove some of the "noise" in the data. By going off this report, it shoes inflations is up 2.4% in May which isn't great but not as bad as 4.1% showing in the old-school PCE report.

Pending Home Sales increased in May, up 3.8% month-over-month. With increased home buying activity, and lower rates on the horizon, we are likely to see a busier housing market in the near future. If you have any clients that are waiting to jump in the market, tell them to get moving now. We have all kinds of calculators and projections that show that buying now is better than waiting for the perfect opportunity. As they say, "Time in the market beats timing the market"