Considering a home in Oregon? That means it’s time to start thinking about mortgage rates. Your mortgage rate is, of course, vital to the total expense of your home loan, and picking the right rate is literally one of the most important decisions you’ll make. Don’t worry, though – we’ve got all the information you need to get started!
Note: Mortgage rates are subject to both personal factors (your credit score, income, etc.) as well as a number of market forces, Fed decisions, indexes, and etc. that can cause them to fluctuate…pretty much whenever they want. This is why lenders and real estate agents talk about locking a rate in or down when you get approved for a mortgage – this allows you to keep that same rate for a month or so while making offers and finalizing the deal, so that your mortgage rate doesn’t suddenly jump through the roof while you are busy buying a house. Rules differ a bit state by state, but this is generally how it works in Oregon. So please, take any numbers we give you with the knowledge that they have probably already changed, at least a little.
Oregon Mortgage Rates and Trends
Remember, when talking about mortgage rates it’s a good idea to compare several different types of mortgages to see where the market is. Rates differ greatly based on the type of loan, even before personal finances are considered. Even if you know what type of loan that you want or what type you qualify for already, the loan market will look at a lot clearer if you scan rates across a section of loans – and if you don’t know, this is a great first step to take when choosing a loan!
With that in mind, let’s take a look at Oregon mortgage rates at the start of 2016. As with most of the country, Oregon saw a massive jump in mortgage rates starting in 2012 and continuing until 2014. This was a reaction against risky loans which greatly aided the real estate crash in the late 2000s: The goal was to make people more careful about getting loans, and slowly stabilize the market. At this point, rates in Oregon rose to 5.50% and higher!
The market course-corrected in 2014 from a combination of factors both federal and local. Oregon was particularly helped by its growing popularity as a state worth moving to – for the past couple years, Oregon has seen the highest number of incoming residents in the country. This helped the market recover, as did the rate drop that went down well below 4.00%. For the next couple years, average rates flirted with the 4.00% mark without actually getting that high again. As you can imagine, this made 2014 and 2015 great times for many people to get refinances!
This brings us to 2016, where average rates have subsided, retreating even farther away from 4.00%. Let’s look at a 30-year fixed mortgage, a 15-year fixed mortgage, and a 5/1-year adjustable rate mortgage. Keep in mind that fixed mortgages have an unchanging rate, so what you see is (typically) what you get, while adjustable rates track the market can either rise or fall over time – lenders engineer them so they will almost always rise when possible, which means they start with low rates and tend to increase over time.
- 30-Year Fixed: This loan tends to be the cornerstone of mortgage rate analysis, because it’s so common. Oregon saw rates around 3.60 % to 3.65% at the start of 2016, with an inclination to rise over time.
- 15-Year Fixed: This loan enjoys much lower rates, because lenders see the shortened payment period as a sign of lower risk. Oregon rates here were hovering around 2.90%.
- 5/1-Year Adjustable: This is actually a hybrid mortgage, and one of the most popular ARM (adjustable rate mortgage) options in Oregon. Here, the rate is locked in for five years so it stays unchanged. Afterward, the interest rate can change once per year, usually guided by both marginal increases and rate caps. Here, rates were between 3.00% and 2.80% during the first couple months of 2016, with a lot of fluctuation.
These numbers are actually very similar to the averages across the country, although the 5/1 loan is currently about 0.10% higher in Oregon. It should be noted, though, that rates across the country in this time were generally falling, while Oregon rates were generally rising.
Oregon Mortgage Rate Trends
After a sharp rise in demand for mortgages in 2014 (coinciding with the sudden drop in rates), Oregon’s mortgage market began to stabilize. Noteworthy changes expected in 2016 include:
- Higher Rates: Yes, there’s no easy way to put this, but rates are on their way up. The Federal Reserve has a hand in it, but also real estate activity is leading to more demand for loans, which means lenders are going to start charging more. This will definitely happen in Oregon, where the housing industry is flourishing and there’s already more demand than supply.
- New Interest in 1-Year ARM’s: This is another sign of a growing real estate market – lenders are more willing to hand out ARM’s, and interest in this affordable-at-the-start loans increases. From a low point in 2014, 1-Year ARM’s are making a steady comeback in Oregon.
- Continued Uncertainty: After a couple years, the market is expected to level out and rates will probably settle down into a rut. But for now, there’s still a lot of uncertainty. Growth is almost guaranteed, but there are a whole lot of different predictions for how much both the real estate market and mortgage rates will grow.
We encourage you to do a little research of your own when searching for loan rates. While bank websites and loan officers can give you quotes and general market information, it’s best to find your rate information from less…biased parties, at least while still shopping. Remember, you can visit several different lenders to compare rates and plans or, if you are willing to pay a fee, have a mortgage broker perform the same service for you. Information is power – and this is one of the most important debts of your life! Don’t take any chances.
2 Point Highlight
This brings us to 2016, where average rates have subsided, retreating even farther away from 4.00%.
Oregon was particularly helped by its growing popularity as a state worth moving to – for the past couple years, Oregon has seen the highest number of incoming residents in the country.
