Portland Mortgage Market Update — October 9, 2026

It was a pretty quiet week! As I mentioned last week, there was no real economic reports that dropped this week, so the market turned to the exciting world of bond auctions and reviewing the minutes from the last Fed meeting. We had a couple pretty strong 10 yr and 30 yr Treasury auctions this week, which should have helped the market but they dropped right around the news cycle where President Trump threatened to re-up action against Iran then changed his tune to say no new action till after the mid-terms. This temporary threat of renewed action caused oil prices to spike which offset the benefit of the strong auction, so rates remained pretty stagnant this week and remain around the 7.25-7.5% range.

When will rates drop? I have been asked this question numerous times this past week, and I think we need to understand how we got here. In the past I have pointed to tariffs or the war in Iran as being inflationary and the threat of inflation causing rates to spike. But if lenders were really worried about inflation being a bigger issue they would be increasing their spreads to make sure the value of loans being originated today did not erode in the future due to inflation. Lenders aren't doing that- in fact the spread between treasuries and rates has been shrinking all year. So inflation (while important) isn't the primary factor; it's the Treasury Yields. Yields are spiking to make them more attractive to investors, and the reason they aren't attractive right now is our burgeoning government spending, where interest payments on government debt is over $1 Trillion/ year. Beyond that, AI companies are financing their buildouts by issuing their own bonds, so there is competition for demand from the private sector as well.

But I still point at the Iran War and Tariffs because they highlight something that is important to homebuyers- stability. We started the year with rates teasing the 5% range, then the war and new tariffs came in and every week/day there was some new calamity that made things more expensive and doom and gloom then bits of good news and... it is just exhausting to keep up with. Rates slowly marched upward throughout the year, back to the mid-6's, and buyers seemed to be ok with that. I think it is the velocity at which rates increased in the past couple of weeks that spooked buyers more than the actual rate increase, because who wants to actively shop for a home today when the threat of a 10% mortgage rate is more likely than rates dropping back to 5%? (Steve Nassar and Joe Fustolo talk about this in their Portland Real Estate Podcast and do a great job of it). So, if we can get some stability in the market, buyers will gradually, tentatively, stop shopping for homes again.

New project coming in! I am working on an in-depth piece buying vs renting through a different lens that might be beneficial to your clients that have decided to hold off on buying for now. I hope to have this out sometime next week, so keep an eye out for it!