Salem Oregon Real Estate Market Update- August 2026
Inventory is increasing quickly, and the possibility of interest rates way above 7%.
The Real Estate market continues to struggle for sellers as overall inventory is increasing exponentially and mortgage rates are hovering around that 7% mark. In fact, at the time of writing this email, MBS Dashboard shows rates crested over 7% today. All indicators point to increased challenges in our Real Estate market. This discouragement on the seller side should translate to a better opportunity for buyers, but we haven’t seen that convert in large quantities quite yet. There certainly are great buying opportunities, especially in the lower end of the market, but overall prices remain resilient despite the economic outlook. In January we had 3.99 months of inventory on the market. 8 months later we have 5.54 months of inventory. At this rate, we could see inventory crest around 6.5 months by year’s end. However, we typically see a slight reduction in inventory around the holidays. Many people dislike showing their homes around Thanksgiving and Christmas, so they pull them off the market and reassess their strategy after the holidays into early Spring. We expect this to happen this year as well. The mid term elections are also soon upon us, which usually makes things interesting. These changes can cause people to pause until they get a sense of which direction the state is heading. These certainly are interesting times upon us.
What we are seeing is the the bond market is struggling with prices decreasing since institutional investors and governments are not purchasing them as they did before. Many investors are seeing the gains in yields so we can expect mortgage rates to continue on their upward trend. Some buyers may want to get ahead of the increased pricing and purchase before rates go even higher!
Many buyers are watching the Federal Reserve and hoping that future rate cuts will immediately bring mortgage rates down. However, as we have discussed many times in the past, the Fed does not directly control mortgage rates. Mortgage rates are influenced much more by the bond market, particularly longer-term Treasury yields and mortgage-backed securities. Investors look at inflation, government borrowing, economic growth and the overall risk of holding long-term bonds. Right now, the bond market is facing some challenges. Longer-term Treasury yields remain elevated, and if investors continue to demand higher returns to hold long-term debt, mortgage rates could stay higher—even if the Federal Reserve lowers short-term interest rates.
In other words, a Fed rate cut can help market sentiment, but it does not guarantee lower mortgage rates. For mortgage rates to meaningfully decline, we will likely need to see stronger demand for bonds, lower longer-term Treasury yields and continued improvement in inflation. For buyers, this means it may be more important to watch the overall bond market than simply waiting for the next Fed announcement. Since the August jobs report came in higher than expected, most people are expecting the FED to keep rates the same; however the next CPI report may show inflation getting further out of hand, so the new FED chair may be faced with an increased dilemma as the president continues to push for lower rate cuts. The next CPI report comes out Friday September 11th.
Here’s a look at the latest Willamette Valley real estate market statistics and how we are trending in our Mid Valley.
MLS Statistics
| Market Indicator | August 2026 | Month over Month | Year over Year |
|---|---|---|---|
 Active Listings | 3,689 | ▲ 3.2% | ▲ 9.6% |
 Pending Listings | 973 | ▼ 8.8% | ▼ 8.3% |
 Sold Listings – All Properties | 729 | ▼ 2.7% | ▼ 8.5% |
 Sold Residential Properties | 560 | — Even | ▼ 3.4% |
 New Listings | 1,118 | ▼ 8.9% | ▲ 6.2% |
 Months of Inventory | 5.54 | ▲ 3.9% | ▲ 11.9% |
 List-to-Sold Ratio | 98.90% | ▲ 0.8% | ▲ 0.2% |
 Absorption Rate* | 20% | ▼ 4.8% | ▼ 16.7% |
 Average Residential Days on Market | 113 Days | ▲ 1.8% | ▲ 17.7% |
Home Prices
| **Price Indicator | August 2026 | Month over Month | Year over Year |
|---|---|---|---|
| Average Sales Price – All Categories | $492,000 | ▼ 0.4% | ▲ 5.8% |
| Median Residential Sales Price | $465,000 | ▲ 0.6% | ▲ 0.4% |
| Average Residential Sales Price | $521,000 | — Even | ▲ 1.8% |
Mortgage Rates
| ***Economic Indicator | August 2026 | Month over Month | Year over Year |
|---|---|---|---|
| 30-Year Fixed Mortgage Rate | 6.71% | ▲ 0.3% | ▲ 3.2% |
What the Numbers Are Telling Us
August continued to show a market with more inventory and more choices for buyers. Active listings climbed to 3,689, up 3.2% from July and 9.6% from August of last year. Months of inventory also increased to 5.54 months, nearly 12% higher than a year ago.
Buyer activity softened during the month. Pending sales declined 8.8% from July and 8.3% year over year, while total closed sales were down 8.5% compared with August 2025. At the same time, new listings were actually 6.2% higher than a year ago, which continues to add inventory to the market.
Home prices, however, remain remarkably stable. The median residential sales price was $465,000, up slightly from both last month and last year. The average sales price across all categories reached $492,000, approximately 5.8% higher than August 2025.
Homes are also taking longer to sell. Average residential days on market increased to 113 days, nearly 18% longer than a year ago. This reinforces the importance for sellers of accurate pricing, strong presentation and strategic marketing from the moment a property comes to market.
Despite the increase in inventory and longer marketing times, sellers are still receiving an average of 98.9% of list price, indicating that properly positioned homes continue to sell close to asking price.
Overall, the numbers point toward a more balanced and buyer-friendly market, while home values continue to show resilience.
*Absorption rate is based on current active listings compared with sold listings during the previous month.
**Residential statistics based on Willamette Valley Multiple Listing Statistics.
***Mortgage rate based on 30-year fixed mortgage statistics.
Some figures are rounded.
Have a wonderful start to your Fall and let us know if we can be of service to you!
March Monthly Market Real Estate Update
Consumers just keep spending with the recent CPI report showing an increase in inflation of .4% from last month and up 3.8% on the year and 3.2% from this time last year. The FED is still a ways from their 2% target and they are continuing to unload their balance sheet which has more of an effect on mortgage rates. This is an interesting site,
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
The disparity between consumer debt and savings continues to be a major problem. Many folks seem to be riding the wave of the past few years where savings out performed consumer debt considerably. With a record number of people enjoying record amounts of equity in their homes, HELOC loans are becoming more popular to also supplement lifestyles and pay off much higher interest rate debt such as Credit Cards. With a Home Equity Line Of Credit, your home’s value can always be a good asset to tap into when needed, but with caution. The equity can be used up quickly and force a position that is not attractive. If you know of anyone that is going down this path, but doesn’t have a plan to escape it, let us know. We can help them prepare before they dig too deep of a hole.
We are showing some good signs of activity in the Real Estate markets. Every market is local and there are also many micro markets within our Mid Willamette Valley market. In some cases we are still seeing multiple offers on homes, although rare, and in other cases many homes are sitting much longer with an average Days on Market of around 120 days for our area. Sales are increasing. We have had 422 detached single family homes sold in February versus 330 in January of 2024. However, we are still seeing inventory remain flat for the most part, which is hedging against values decreasing. Although the average sales price dropped from last month, it is too early in the year to determine how much of that is an issue. With such little data at the beginning of the year, the stats might say one thing, but we can tell you on the front lines that values are remaining strong. The data will paint a clearer picture the further we get into the year.
Statistics show that you know at least 4 people that will move this year. Please give them our name and phone number, or let us know if we can reach out to anyone to help them. We work hard to put all of the pieces together to encourage healthy homeownership.
| Current Active Listings (All Types) | 2239 | Down 1.0% from last month & up 12.7% from this time last year |
| Current Pending Listings | 913 | Up 7.9% from last month & down 6.4% from this time last year |
| Sold Listings Last Month | 533 | Up 1.7% from last month & up 1.9% from this time last year |
| New Listings Last Month | 847 | Up 4% from last month & up 1.3% from this time last year |
| Months of Inventory | 3.29 | Down 1.2% from last month & up 31% from this time last year |
| % List to Sold Ratio | 98.40% | Down .7% from last month & up .2% from this time last year |
| Absorption Rate | 24%* | Up 4.2% from last month & down 11.7% from this time last year |
| *Based on current active listings vs sold listings for the past month | ||
| Average Sales Price in All Categories | $457,000 | Down 2.2% from last month & up 1.32% from this time last year |
| Average Residential Sales Price | $487,000** | Down 1.63% from last month & up 2.7% from this time last year |
| **Based on Willamette Valley Multiple Listing Statistics | ||
| Average Owner Occupied Interest Rates | 6.88%*** | Up 3.7% from last month & up 2.2% from this time last year |
| ***Based on Freddiemac.com Statistics of 30 year fixed mortgage | +Some numbers are rounded |