· Mortgage Rates1 – A generally slow news week was punctuated by Fed Governor Christopher Waller, who is a voting member and one of the most influential Fed members. In comments earlier this week, Governor Waller said that the data suggests that inflation isn’t accelerating, and that the April CPI inflation reading was a relief. He also said that monetary policy is currently at an appropriate level to put pressure on inflation and that he does not think further interest rate increases will be necessary (and that any cuts are likely “several months” away). With little else to move the market, our benchmark rate came in flat, maintaining at 6.990% (7.013% APR) with slightly less credit.
· Weekly Market Data2 – And just like that, we are above 8,000 Active listings. Another week of +/- 1,500 new listings and something closer to 1,100 going under contract has once again added to the pool of available homes. Median Days on Market contracted slightly to 9 days. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – We had 67% of offers accepted this past week. Over the past couple of weeks we have seen a slowdown in the number of offers and we anticipate that this will continue through Memorial Day weekend. Of the offers that were accepted, they were on average 1% over the list price. As is typical when we begin to roll into the summer months, it seems that peoples’ attention is turning toward vacations and managing kids who are out of school – despite the fact that we are seeing the highest inventory levels we have seen in well over a year. This combination of buyers becoming distracted and more inventory on the market can be great for those committed buyers who continue to focus on house hunting; potentially allowing them to get into a new home before the 4th of July holiday is upon us.
· Market Trends – Coming up with a down payment is often one of the largest hurdles to homeownership. Fortunately, there are a number of Down Payment Assistance programs (DPA) available to fill this gap, but determining which one is right for you depends upon your particular situation. DPA programs come in a couple of flavors, some are grants which typically have slightly higher interest rates and commitment periods, while others are in the form of a second lien. They will also typically have minimum credit scores and maximum income limits, as well as minimum cash requirements. Programs that offer a true 0% down payment have been harder to come by, but our portfolio of lenders continue to expand their programs and recently introduced a proprietary DPA program that provides up to $15,000 of support for first-time homebuyers with no borrower contribution required (of course, certain restrictions apply).
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 6.990%, and a P&I payment of $3,190. The Annual Percentage Rate (APR) is 7.013%, which reflects a lender credit of 0.009% ($43). 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 05/23/2024 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 05/16/2024 to 05/22/2024. 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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