Fair and Perez | NCW real estate market strong, Federal Reserve offers no help to mortgage market

Federal Reserve System

On Oct. 29, Federal Reserve Chair Jerome Powell announced a quarter-point cut in the federal funds rate. In the same press conference, he confirmed the Fed will end its "quantitative tightening" program and resume buying assets.

Unlike during the post-COVID stimulus period, however, the Fed will focus on short-term Treasuries rather than mortgage-backed securities or long-term Treasuries. This shift primarily helps the U.S. Treasury finance and refinance ongoing budget deficits rather than support the mortgage market.

The reaction was immediate: Despite the rate cut, the 10-year Treasury yield — a benchmark closely tied to mortgage rates — rose from just under 4% to 4.1%. The 30-year mortgage market followed suit, offering no relief to homebuyers looking for lower rates.

Local real estate

Despite Washington's monetary policy maneuvers, the local single-family housing market remains strong. Year-to-date unit sales in Chelan and Douglas counties are up 7.84%, and total dollar volume is up 5.96% compared with the same period last year.

Growth has been balanced across most price ranges, with only the $2 million-plus segment showing a decline. The increase is also evenly distributed across all three subregions within the two-county market area.

(See Chart 1: YTD home sales by price range for all of Chelan and Douglas counties.)

The next chart illustrates how influential the June through September period continues to be, accounting for a large share of annual market activity, particularly in the past two years.

(See Chart 2: Monthly sales activity, 2022 through 2025.)

As noted at the end of the second quarter, inflationary pressure has begun to influence the under-$500,000 price range, where inflation and supply issues are increasingly evident.

(See Chart 3: Price per square foot of existing home sales.)

Greater Wenatchee market

The Wenatchee area reflects the same healthy trends seen across Chelan and Douglas counties. Sales are up, prices are up, and activity is strong across nearly every price range except for homes priced above $2 million.

Lake Chelan market

In Chelan, sales growth remains steady. Unit sales are up nearly 8%, while total dollar volume has increased 2.39% due to a modest decline in high-end transactions. The market continues to demonstrate broad buyer interest and stable pricing, even with fewer luxury-tier closings.

(See Chart 5: Lake Chelan market performance.)

Upper Valley market

The Upper Valley shows similar results, with sales up 2.27% both by unit count and by total dollar volume. This consistency underscores the balanced strength of the two-county market, where growth is well distributed across subregions and price categories.

(See Chart 6: Upper Valley sales overview.)

Outlook

While national monetary policy offers little direct support to mortgage borrowers, local market fundamentals remain resilient. Steady demand, limited supply and moderate price appreciation continue to define the region.

Looking ahead, there remains a possibility of lower long-term interest rates if the stock market experiences a significant correction. In such periods, investors often shift funds from equities into bonds and Treasuries, creating a "flight to safety" that pushes yields — and therefore mortgage rates — lower. However, this effect would likely be temporary unless accompanied by a sustained slowdown in inflation or broader economic weakness.

For buyers: Rising mortgage rates remain a headwind, but local inventory and employment stability keep opportunities available, particularly below the $750,000 range.

For sellers: Consistent buyer activity and balanced growth suggest continued strength heading into 2026.

Brian Fair is a former CPA and former debt collector. He purchased Pioneer Title in 2021. Yaneli Perez started in escrow in 2021, working her way up from the front desk, and is studying marketing at Western Governors University.