September Market Update

Interest rates are leading the news this month, having dropped to levels we haven’t seen in 13 months. Last week’s weaker-than-expected jobs report was the main driver behind the decline, signaling a softening job market and all but guaranteeing a Fed rate cut at next week’s meeting. In addition, this week’s downward revision of more than 900,000 jobs from 2024 makes a cut this month nearly certain, with many now expecting a ½ percent reduction instead of the usual ¼ percent.

Mortgage demand has surged to its highest level in three years, with both refinance and purchase loan applications showing strong increases. I’m hopeful this momentum will encourage more buyers to move off the sidelines and bring renewed energy to the market. This weekend’s open houses could provide an early indication.

As is typical for this time of year, inventory is gradually decreasing. Over the past month, most of the Tri-Valley has seen modest declines, with the exception of Livermore, which experienced a slight increase of seven homes. I anticipate inventory levels will continue to ease through year-end, though sharper rate drops could shift dynamics and prompt more activity from both buyers and sellers. Many experts are forecasting mortgage rates could fall another ½ to 1 percent before the end of the year. If that proves true, we may see a meaningful uptick in market activity.