Any disappointment with the local real estate market during the summer of 2013 likely had to do with mortgage rates.

Any disappointment with the local real estate market during the summer of 2013 likely had to do with mortgage rates.

The 30-year interest rates jumped from the 4 percent range to nearly 5 percent. That didn't necessarily discourage buying, but it certainly narrowed the field for buyers.

Recently, however, the Federal Reserve pulled a lever to put downward pressure on long-term rates when it said it would continue purchasing bonds indefinitely.

"That put interest rates back where they need to be," said Geoff O'Neil, an agent with John L. Scott Real Estate in Medford. "We had a little bit of a hiccup because interest rates went back up, but they're down a hair now."

He spotted an adjustable-rate mortgage as low as 3.25 percent on Thursday.

"We've had fantastic interest rates," O'Neil said. "But this is a mental and psychological boost."

Higher interest rates contributed to a sales slowdown in Jackson County during the third quarter, even though the median price rose in most areas.

Figures compiled by Southern Oregon Multiple Listing Service showed the county's median sales price climbed 17.7 percent, to $200,000 from $169,900, for a three-month period ending Sept. 30. In September alone, the median was $210,000.

With the exception of the Upper Rogue region — accounting for about 9 percent of transactions — every area showed rising medians, led by Jacksonville, Gold Hill and Rogue River.

The number of deals declined by 9.7 percent for the three-month period, to 522 transactions from 578 for the similar period in 2012.

The turnaround time for homes that sold during the quarter was 46 days, down from 58 days a year earlier.

The inventory of homes on the market grew 3.4 percent over last year as 1,178 homes were in the SOMLS system as of Sept. 30.

"We're down to three months' worth of inventory," O'Neil said. "If a house is in nice condition it can be moved pretty quickly up to $350,000."

Even with lower rates, he said, lenders are more careful and buyers are thinking differently.

"They're being more cautious and looking long-term," O'Neil said. "They're not thinking about selling in two years, they're thinking about staying seven years, or at least until the kids are out of school."

In neighboring Josephine County, the three-month median for existing homes picked up 11.3 percent, to $172,500 from $155,000. There were 129 transactions during the period, compared with 111 in 2012.

Reach reporter Greg Stiles at 541-776-4463 or Follow him on Twitter @GregMTBusiness.