- Mortgage Rates1 – What a week! It started off on Tuesday with a better thank expected October Consumer Price Index (CPI) report showing overall inflation was flat for the month, which was one tenth lower than estimates of 0.1%. Year over year, inflation declined from 3.7% to 3.2%. This was followed by a lower-than-expected October Producer Price Index (PPI) report which year over year fell from 2.2% to 1.3%. Then on Thursday Initial Jobless Claims, which measures individuals filing for unemployment for the first time rose and was higher than expected. The bond market reacted positively to these reports and our benchmark rate dropped nicely to 7.125% (7.195% APR).
- Weekly Market Data2 – Active Listings continued a slight decline (which is typical for this time of year) and dropped another 2% to 7,175 homes. There were 747 new listings of which 16% went under contract. We had another slow week of closings with only 599 pushing our Median Days on Market up to 21, the highest we have seen it this year. The number of listings on the market for under 30 days continues to get smaller and is now at 33% of total active listings. (Source REColorado, all DMAR counties, this past week -Thursday to Wednesday).
- Columbine Team Insight – It was a solid week of offers with 100% of them being accepted. All of the offers either had seller concessions or were made below list price for an average of 2.4% below the list price – the largest we have seen year to date. With Thanksgiving next week and then the December holidays following quickly behind many buyers will decide to wait until next year to jump into the market, yet with lower interest rates and sellers willing to negotiate this could be the perfect time to make an offer, it stands a good chance of being accepted.
- Market Trends – The 1-0 Temporary Rate Buy Down has been a big hit with both buyers and sellers these days. This relatively low cost (typically under $5k depending upon the loan size) option can have a big impact on the monthly payment for buyers for the first year as we wait for interest rates to decline. With almost 70% of homes sitting on the market for 30 days or more, many sellers are open to providing seller concessions to help with a sale. Add in that we have a lender now offering to cover the cost of an appraisal with any 1-0 Temporary Rate Buy Downs and this may be just the right option for both parties.
NOTES:
(1) The mortgage loan scenario presented assumes the purchase of a primary residence, excellent credit, an 80% loan-to-value (LTV), a loan amount of $480,000, a 30-year fixed interest rate of 7.125%, and a P&I payment of $3,234. The Annual Percentage Rate (APR) is 7.195% with a 0.034% ($163) lender credit. Monthly principal and interest payments, which will continue for the stated term until paid in full, do not include mortgage insurance, property taxes or homeowners’ insurance premiums and actual monthly payments may be higher. Interest rates are current as of 11/16/2023 and are subject to change at any time without notice. All loans are subject to credit approval. Other terms and conditions may apply. Not all loans or products are available in all states. Regulated by the Colorado Department of Regulatory Agencies, Division of Real Estate.
(2) Source: REColorado®, Inc for the period 11/09/2023 to 11/15/2023. Data for Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park counties. This representation is based in whole or in part on content supplied by REColorado®, Inc. and REColorado®, Inc. does not guarantee nor is it in any way responsible for its accuracy. Content maintained by REColorado®, Inc. may not reflect all real estate activity in the market.
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