Are Global Events Starting to Show Up in the Local Housing Market?

I generally think it’s a good rule of thumb not to mix politics with real estate. That said, it is worth looking at whether recent events in the Middle East are starting to have any impact on the local housing market.

Let’s start with a quick review. Ongoing unrest and rising oil prices have pushed mortgage rates higher over the past month. The average rate has moved from around 6% to a range between roughly 6.4% and 6.6%. That’s not unfamiliar territory, but it’s a range many were hoping we wouldn’t revisit anytime soon.

The next question is whether that change is starting to show up in buyer activity.

The first place to look is mortgage applications. Nationally, application volume has declined for three straight weeks, down 10.9%, 10.5%, and 10.4%. There isn’t a clean way to isolate that data locally, but in conversations with a few lenders here in Central Oregon, they are seeing a similar slowdown in new applications.

The second place to look is pending sales. Smaller markets like La Pine, Sisters, Prineville, and Madras can be harder to interpret month to month due to volatility, but in Bend and Redmond, we are not seeing a slowdown show up yet.

Redmond actually had a very strong month for homes going under contract, particularly in the low $400K price range. Bend continues to follow its typical seasonal pattern, with steady growth in pending activity. The actual number at the time of writing is also 634. It’s about as “on script” as it gets, and a clear sign that rising rates have not yet impacted buyer behavior at that level.

There is, however, one trend I’m watching closely that could easily be misinterpreted.

Through the first few months of the year, we are still on pace for the annual median home price to come in lower in 2026 than it did in 2025 across most Central Oregon markets, including Bend and Redmond. At first glance, that might suggest prices are softening. In reality, the likely driver is who is participating in the market.

Lower rates earlier in the year allowed more entry-level buyers to re-enter the market, which increased the number of lower-priced homes selling and pulled the median price down.

We’ve seen this dynamic before. In 2023, when rates climbed from the mid-6% range to near 7% in late spring, those lower-end buyers quickly stepped back. The mix of sales shifted, and median prices moved higher, even though the overall market had not fundamentally strengthened.

That’s the inflection point we may be approaching again. If rates continue to rise, we could see a similar shift in who is active in the market, which would impact median price trends in a way that doesn’t necessarily reflect overall market health.

In the meantime, if you want a simple way to understand who currently has leverage in a negotiation, watch days on market. That continues to be one of the clearest signals of how buyers and sellers are interacting in real time.