Are Interest Rates Going Down? Should I Wait or Start Home Buying Now in Vancouver, WA?

It’s the headline no one expected: the average 30‑year fixed mortgage slipped to 6.19 percent in late October, its lowest level in more than a year, while 15‑year loans eased to 5.44 percent. That drop made national news, but let’s not kid ourselves: these are still historically steep interest rates, and the story behind them is messy. Mortgage rates track the 10‑year Treasury yield and are buffeted by everything from Federal Reserve policy to bond‑market jitters. A year ago the same loan averaged 6.54 percent; at the height of the pandemic it was under 3 percent. If you’re sitting on the sidelines waiting for a return to those “easy money” days, you might miss the window.

What the Fed is really up to

Federal Reserve officials spent much of 2025 worrying about a slowing labour market and sticky inflation. Job growth slid to about 29,000 new positions per month between June and August, a far cry from pre‑COVID averages. Meanwhile, the Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, climbed back to 2.7 percent in August after hitting a low of 2.3 percent in April. Leading central bankers, including Chair Jerome Powell, have made it clear they’re laser‑focused on the job market and don’t want to unleash inflation by cutting too fast. The data vacuum created by October’s temporary government shutdown is only adding to their caution.

As a result, even though markets expect modest rate cuts, policymakers such as Fed governor Christopher Waller warn that any cuts should be “cautious” and depend on inflation behaviour. Minneapolis Fed president Neel Kashkari bluntly admitted that the longer the government’s data blackout lasts, the less confidence he has in the Fed’s read of the economy. Translation: our local home buying decisions are being held hostage by national politics and macro‑economics.

Powell’s tough love for housing

If you think the central bank is going to bail out the housing market, think again. During a July testimony before the Senate Banking Committee, Chair Powell was asked whether lower interest rates would reduce housing costs. His response? It “wasn’t obvious” that cheaper money would bring down prices. Powell pointed out that a chronic shortage of homes, not just borrowing costs, drives today’s high prices. He warned that home buying costs could remain elevated due to high insurance premiums, material costs and labour shortages even after short‑term rates normalize. Mortgage rates around 6.8 percent are already more than double their pandemic lows; simply trimming the federal funds rate may not be enough.

Forecasts paint a sobering picture

Industry projections echo this realism. The Mortgage Bankers Association predicts that mortgage rates could still be 6.5 percent at the end of 2026, while Fannie Mae expects them around 5.9 percent. Analysts believe rates will stay above 6 percent for most of 2026 and possibly 2027. Experts say borrowing costs need to fall to roughly 5.75 percent to bring sidelined buyers back into the market. Yet a half‑point reduction in the federal funds rate (which markets widely expect) may not move the needle much. High federal deficits and stubborn inflation expectations could keep long‑term yields, and therefore interest rates, elevated. In other words, waiting for a steep drop in rates could be a costly fantasy.

The Clark County reality check

While pundits debate Fed minutia, Clark County’s housing market is experiencing its own strange brew. According to Redfin’s September data, the median sale price in Clark County was $553,000, down a negligible 0.24 percent from a year earlier. Homes are selling for about $304 per square foot, up 1 percent year‑over‑year. The county logged 572 sales in September, an 11.1 percent increase from 515 a year ago, and the typical house spent 41 days on the market compared with 35 days last year. In other words, prices are essentially flat while inventory is finally loosening.

Local agents confirm that the market has shifted. A July report in The Columbian noted that abnormally high inventory and lagging sales have put buyers in their strongest position since 2020. May pending sales were down 6 percent from May 2024 and represented one of the weakest Mays in over a decade. Brokers blamed the slowdown on a late‑spring spike in interest rates above 7 percent, which briefly stalled activity. Even so, new listings were up 8.5 percent and the median home price climbed 7.5 percent to roughly $574,900, showing that sellers still expect premium prices. Another story from September observed that homes are sitting on the market an average of 62 days, up from 46 days a year earlier, and many sellers have had to lower their asking prices. In short, Clark County finally has inventory and leverage for buyers, but high interest rates are scaring off the faint‑hearted.

So should you buy or wait?

Here’s the controversial part: if you genuinely believe interest rates are going back to pandemic lows, you are effectively betting that inflation will disappear, Congress will rein in spending and the Fed will ignore supply‑driven price pressures. The Fed’s own forecasts and Powell’s testimony suggest that’s unlikely. Even if short‑term rates come down, long‑term mortgage rates are tethered more to Treasury yields and investor expectations. Meanwhile, Clark County sellers are learning to price realistically; the selection of homes is broader than it has been in years, and there’s evidence that sellers will negotiate.

From my perch as a real‑estate professional watching this market daily, I’d rather “marry the house and date the rate.” That means focusing on finding the right property and locking it in while inventory is high. You can always refinance later if interest rates dip, but you can’t rewind time to scoop up a well‑priced property once it’s gone. Waiting for the perfect number could leave you chasing higher prices or tighter supply.

My Honest Take

No one, least of all the Federal Reserve, knows exactly where interest rates will be a year from now. What we do know is that Clark County’s housing market has softened without crashing, offering a rare opening for buyers. High home buying costs aren’t going away just because Jerome Powell cuts a few basis points. If you’re ready to put down roots in Southwest Washington, don’t let fear of the unknown hold you back. Talk to a lender about creative financing, explore home buying options with a local expert, and remember: the best time to buy a home is when you’re ready, especially when the rest of the market is on pause.