April Showers Bring May Flowers! ?? As the days get longer and the sun shines brighter, the snow inevitably melts away giving way to the blooms of springtime. What a spectacular time of year here in Colorado. Mother Nature has been showing off a bit this past week with a couple of sunny 80 degree days – one of the many reasons I love living in Colorado! Hopefully you too were able to get out there and enjoy some fun in the sun! Dining alfresco, here we come!
Market in a Minute
It’s been an interesting month for mortgage rates. Rates continue to be highly reactive to each new economic data release, but the overall trend since early March has seen rates on a downward sloping trajectory. Last week, some major inflation data hit the wire, along with the minutes from the Fed’s March meeting where they raised the Fed Funds Rate for the 9th time in a year. The Consumer Price Index came in at expectations, rising only 0.1% in March and showing year-over-year inflation of 5%, down a full percentage point from February. However, Core CPI (which takes out the more volatile food and energy prices) did increase slightly by 0.4% MOM. A mixed bag of data, but overall good news that inflation is moving in the right direction. Following on the heels of the CPI data, the Fed meeting minutes suggested that due to the still high inflation and tight labor market, that they will likely raise rates one last time at their meeting in May, even with the increased likelihood of a recession later this year (due to the fallout from recent bank failures). It will be a balancing act for the Fed between its ongoing policy to push inflation down, while trying to steer the economy to a soft landing… or at the very least, to minimize the severity of a recession. Overall, the markets have reacted favorably to the latest information and investors seem to be indicating that a rate hike by the Fed in May will probably be the last time they raise the Fed Funds Rate this year. Having a little bit of optimism in the air (even just a little bit) has translated into prospective buyers finding renewed energy as the spring buying season begins to pick up steam.
On the real estate side, we are not seeing the same kind of frenzied spring season that we saw last year. Buyers are doing their research and taking more time to consider their choices before placing offers on a home. Still, there are plenty of instances where we are seeing multiple offers, with homes that are move-in ready in ‘high demand’ neighborhoods seeing the strongest competition. Active listings increased nearly 20% to 4,516 homes on the market at month end. DMAR data for March 2023 also showed New Listings increasing just over 45% from February, but were still down 15% from a year ago, highlighting the fact that sellers are not ‘front-ending’ the selling season like we have seen the past couple of years. Whether this dynamic reflects a return to a more typical seasonal pattern or a continuing theme of prospective sellers simply being hesitant to jump into the market will play out over the next couple of months. The good news for all involved is that today’s buyers appear to have adjusted to the current rate environment and have a better understanding of the market – carefully considering the particulars of a given property and recognizing the difference between a competitive situation for a home that is recently listed and a property that may have been sitting on the market longer (or which has recently fallen out of contract). Median home prices in the Denver Metro area remained relatively flat at $565,000 and homes are being snatched up just as quickly as they are coming on the market, with median days on market down a whopping 60% from 25 days in February to 10 days last month.
With our fast-paced and ever-changing market, navigating the home buying process can be a challenge. Working with a mortgage professional who understands the market can help ensure you are using every tool in your toolbox – optimizing for property-specific opportunities and ensuring you loan for YOU! If you or someone you know are thinking about buying a home, give me a call – I’d love the opportunity to discuss options and provide my insight – and perhaps we’ll be able to get you into your new home in time to kick off the summer!
Monthly Morsel: Arbor Day!
In this month’s eReport, I am sharing information about Arbor Day, a secular holiday that encourages the planting of trees. I also share a few facts about how trees benefit our communities and a few ways you can celebrate this day with your family.
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