Mortgage interest rates for 30-year loans are creeping closer to 5 percent.
While those interest rates have collared the number of transactions, they've yet to halt the steady increase in Jackson County's median single-family residence sales price.
For the three months ending June 30, Southern Oregon Multiple Listing Service said Monday the median price for existing houses was $189,000, 16.7 percent higher than the $162,000 figure of a year ago. The median price for new construction going through SOMLS rose 31 percent, year-over-year to $244,981 from $187,000.
But while prices are climbing, the number of sales has slowed compared with a year ago, as interest rates have dampened the deal-making. During the second quarter of 2013, the pace of sales declined 5.3 percent, with 551 houses exchanging hands compared to 580 last year.
"The interest rates are not helping us," said JJ Kramer of John L. Scott Real Estate in Medford. "It's already making a difference. I had someone ready to buy a $475,000 house. They were ready to write an offer and then the interest rate went up and they couldn't afford it."
Earlier this year, declining inventory coupled with interest rates below 4 percent sparked sales activity and boosted new construction.
"We really hit the perfect storm then," Kramer said. "Even though the 4.8 percent rate we had today is historically low, but it's still very, very frustrating."
Talent saw a 31.4 percent gain to $209,000 in median sales value, while Eagle Point's median jumped 26.4 percent to $240,000.
East Medford recorded by far the most sales for the month, with 156 existing homes sold, down from 175 a year prior. The area also recorded the most new homes sold, with 21, up from eight in June 2012.
Normal sales continue to win back more of the market from the foreclosures and short sales that were prevalent from 2008 to 2012. SOMLS reported 78.4 percent of transactions were normal sales, with short sales accounting for 14.2 percent and foreclosures falling below 7 percent.
"They're pretty much gone," Kramer said. "We still meet clients who ask for foreclosures, but there are very few bank-owned properties out there."
Although the inventory of existing homes is 8.4 percent below where it was a year ago, between the end of May 31 and June 30, the number of houses on the market grew by 50 to 1,123.
"There is still more demand than supply right now," Kramer said. "That's especially true for the lower-dollar stuff. You get down to $180,000 and it's really hard to find, but all across the board there is a shortage of inventory."
Reach Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter @GregMTBusiness.