· Mortgage Rates1 – It’s the tale of two jobs reports; earlier this week the ADP Private Payrolls Report came in much lower than expected, but the widely watched BLS Jobs Report came in hotter than expected this morning. This set up the market with a bit of a head fake – improving earlier in the week and then giving it back later with the BLS Jobs Report announcement. Our benchmark rate clocked in at 6.875% (6.916% APR), but we anticipate seeing that move higher into the start of next week.
· Weekly Market Data2 – The pace of Active Inventory growth is picking up; now approaching 9,000 homes on the market. A resurgence in new listings (1,568) and fewer homes going under contract (1,053) gave us the single largest weekly jump we’ve seen in some time. This is consistent with the month-end data we saw come out of DMAR that showed inventory hitting levels last seen in Sep 2019. Median Days on Market held steady at 9 days. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – It was another strong week of offers being accepted, with 88% going under contract. The increased inventory and steady number of under contracts has softened competition for many homes (not all homes!) and buyers are booking some wins. Offers were accepted at an average of 1% under list price, with a couple negotiating seller concessions. While some might say interest rates are driving a slow down in buyer demand, we are not so sure. Our sense is that we are seeing a return to a more regular seasonality, where the start of summer vacation coincides with a natural slow down in buyer activity. Will the increased inventory lead to price reductions? We are not holding our breath, but if inventory continues to grow at this pace…
· Market Trends – Prequalifying borrowers with salaried jobs, savings in the bank and high credit scores can be pretty straight forward; however, this type of profile is far from typical. Income can be complex, assets can come from numerous sources and credit may need some repair. This doesn’t preclude potential homeowners from being able to purchase, but it does require a bit of preparation to ensure all three are in the best position possible to set the borrower up for success. We focus on understanding the complexities of a prequalification and will often do significant research to find the lender who is the best fit. In more complex situations, we will submit a file in for a full TBD (no address yet) approval with them. Borrowers who spend time preparing for a purchase will be in a position to obtain the best mortgage for their needs without the stress of being under time pressure. Just reach out we would be happy to get you ready to purchase a new home this summer!
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 6.875%, and a P&I payment of $3,153. The Annual Percentage Rate (APR) is 6.916%, which reflects a discount fee of 0.171% ($821). 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 06/06/2024 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 05/30/2024 to 06/05/2024. 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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