Lane County home sales down as mortgage rates and economic uncertainty rise

Rising interest rates are taking a bite out of Lane County’s housing market.

The 292 home sales that closed countywide last month was the lowest May total in four years, according to data from the Regional Multiple Listing Service. It was down from 354 closed sales in April, and 346 in May 2025. The data does not include the Florence area.

The market had been showing some strength just a month earlier. The April sales figures were a three-year high for the month.

But rising mortgage interest rates now appear to be driving the slowdown. After years of 3% or lower interest rates, they spiked to over 7% in 2022 as countries emerged from COVID-era lockdowns and the Russia-Ukraine war caused oil prices to surge — both of which drove inflation sharply higher.

When inflation rises, the Federal Reserve typically increases interest rates on loans to slow price growth and keep inflation from spiraling out of control. But the consequence is more expensive borrowing, including for would-be homebuyers.

“I definitely think it’s directly tied to interest rates,” said John Romito, co-owner and principal broker of Heart & Home Real Estate in Eugene, of the falling home sales. Interest rates on a 30-year mortgage “dipped a bit under 6% earlier this year, but probably for about a week now they’ve been around the 6.65% mark. And I think because of that, it’s definitely holding prices tight and lowering our buyer pool.”

The ongoing war with Iran appears to be the main culprit. Mortgage rates fell to 5.98% on Feb. 26, according to data from Freddie Mac, the first time they were under 6% since September 2022.

Military action started just two days later, and Iran quickly moved to shut oil tanker traffic out of the Strait of Hormuz. The resulting price spikes quickly shot gas prices more than 20% higher nationwide, and drove the inflation rate to a three-year high.

With costs rising, the outlook for the war uncertain and the Federal Reserve now increasingly likely to raise interest rates this year, many Lane County buyers appear to be waiting.

“The uncertainty in the global markets and what we have is directly tied to the (interest) rates and the cost of living,” Romito said.

The market hasn’t exactly come to a standstill. There were 523 new listings for Lane County houses in May, up from 503 in April, but down from 594 in May 2025. The 396 pending sales were up from 365 in April, but down from 440 in May 2025.

For the full year to date, new listings are down 7.3% from last year, pending sales are down 2.4% and closed sales are down 3.3%. The $437,000 median sale price is up slightly from $435,000 a year ago. The average house that sold this year was on the market for 66 days, up a bit from 63 days last year.

Housing inventory — the amount of time it would take to sell all the listed houses based on the current sales pace — climbed to 3.1 months in May from 2.3 months in April, which was a two-year low. Six months of inventory is the typical marker for a “balanced” market where buyers and sellers are on even footing. Lower inventory typically favors sellers because there are fewer options for buyers.

Homes that hit the market at the right price are still selling fast, Romito said, and many of the fundamentals of the Lane County market are unchanged over the past few years: tough conditions for first-time and lower-income buyers, but plenty of opportunities for higher-end buyers, especially those with cash for a purchase.

Less geopolitical uncertainty in the coming months could also bring some buyers off the sidelines.

“I anticipate that it’s a temporary holdup,” Romito said of the May figures. “Once we see things settle down globally with inflation rates, hopefully things will start to sell more and we’ll see more activity in the market.”