· Mortgage Rates1 – It’s been a fairly quiet week with regards to economic data following last week’s Fed meeting and BLS Jobs Report. The favorable response to the data held up through the beginning part of this past week, but with Fed Chairman Powells’ comments in front of the IMF and the weak 30yr US Treasury auction on Thursday, we gave up some ground. Overall mortgage interest rates have moved cautiously lower this week and our benchmark rate dipped to 7.375% (7.452% APR). This past week’s Jobless Claims data also indicated that the labor market seems to be softening, as continuing claims increased again and have increased a total of 173,000 over the last 8 weeks – continued weakness in the job market will keep continued downward pressure on rates.
· Weekly Market Data2 – Active Listings shrunk by 2% to 7,288 homes on the market, of which there were 771 new listings this past week. This marks the fourth week in a row that new listings have declined and a relatively small percentage (15%) of those went under contract in their first week. The number of listings on the market for less than 30 days continues to get smaller and is now at 34% of total active listings. The total number of new contracts bumped up 6%, hitting 712 for the week. We saw a 33% drop in closings to 571 (following what might be interpreted as an ‘end of month’ surge) – and all of this factored into Median Days on Market moving down to 17 days. (Source REColorado, all DMAR counties, this past week -Thursday to Wednesday).
· Columbine Team Insight – Another slower week for offers going out for our team. While there are many properties out there that have been on the market for more than 30 days (and that typically spells opportunity for negotiating either purchase price or seller concessions), we’ve had a few instances recently where specific homes garnered some heavy competition and ultimately sold well over asking price. Are these cases of strategically marketing a lower price to generate market interest? Perhaps, but seems like a risky strategy in this market. Clearly, it’s important to understand the dynamics of your target property, and buyers with skilled realtors on their side will find themselves with a competitive advantage.
· Market Trends – A “Buy Before You Sell” program is a novel solution for homeowners looking to purchase a new property before selling their current one, but who (a) may not qualify with two mortgages or (b) may also need to access the equity in their current home for the down payment, etc. As a Broker, Columbine Mortgage has access to these innovative programs that may just be the answer for those particular buyers. In addition to allowing home buyers access to the equity in their home, these programs provide a guaranteed offer price to purchase their departure home if it doesn’t sell within a certain period of time after being listed. This enables the borrower to make a more competitive, non-contingent offer on a new home, while still qualifying for the new home loan without counting both mortgages towards their Debt-to-Income ratio. There is a cost to these programs but the benefits of a non-contingent offer in addition to eliminating the uncertainty and stress of having to time the sale of their current home may be worth the added cost if it helps a buyer secure their dream home.
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 7.375%, and a P&I payment of $3,315. The Annual Percentage Rate (APR) is 7.452% with a 0.123% ($590) discount fee. 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 11/09/2023 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 11/02/2023 to 11/08/2023. 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.
Recent Comments