We've Been Here Before (Cautionary Warning About Rates)

Whether you follow me on Instagram or read my latest blurb in the Bend Buzz, there’s a cautionary point I’ve been repeating often: just because the Federal Reserve cuts the Fed Funds Rate doesn't mean mortgage rates will continue to fall. I bring this up now because we’re seeing the same pattern build—and so is the hype.

In late July and early August of last year, job market reports showed signs of softening. The unemployment rate had climbed to 4.3%, and prior reports were revised downward. The market responded with improving mortgage rates. Later that month, the Federal Reserve Chair announced that a rate cut was appropriate, and rates dipped even further, bottoming out around 6.1%. But just a few days after the actual cut, mortgage rates reversed course and began climbing—eventually crossing back above 7% within a month. That shift was fueled by stronger-than-expected economic data and statements from certain Fed members that introduced caution back into the market.

Fast forward to this year: a weak jobs report came out in late July, the Fed signaled in August that a September cut is likely, and mortgage rates have been trending downward again. As of this morning, we’re right back at an unemployment rate of 4.3%. So what happens after the actual cut? No one knows for certain, but the pattern feels familiar. I’m not saying mortgage rates will spike again, but last year’s script reminds us that surface-level optimism doesn’t always translate to long-term relief.

Here in Central Oregon, buyers responded quickly to the August rate improvement. Activity jumped across nearly every price point in the first week, with the strongest and most in-demand segments continuing to perform well. Other segments saw a quick burst before returning to more typical patterns. For sellers, the path forward remains uneven. While lower rates helped boost interest, they haven’t magically solved inventory challenges or sped up timelines in every price range or neighborhood.

Personally, I’m eager to see what September brings. Between mortgage rates, buyer sentiment, and overall market momentum, there’s still plenty of room for movement in either direction. What I do know is that the last time we saw this kind of optimism tied to a Fed announcement, things didn’t unfold the way many expected—and that’s something worth remembering as we head into fall.