Can you believe we are nearly halfway through 2023! After a longer than usual absence, summer has finally made an appearance, just in time for the summer solstice. What will you do with that extra 5 hours and 38 minutes of daylight? Well, the long summer days are easy to fill with leisurely pool-time, BBQs, tennis, hikes, picnics, concerts, dining al fresco, and dreamy vacations – and if you are lucky, you might even squeeze in a ballgame too! No matter how you ultimately plan to spend your days, I hope that you’ll have a chance to trade in your ‘to-do’ list for a summer bucket list – it is way more fun!
Market in a Minute
Interest rates have been on an upward trend this past month, as economic data continues to be the primary market mover – particularly after the debt ceiling stand-off moved into the background. Of course, we’ve been hearing a lot about inflation and the CPI (Consumer Price Index) and PPI (Producer Price Index) data. Data released last week continued to show top-level inflation moving in the right direction, with CPI down to 4.0% (from 4.9% in April). But at the same time, we saw CORE CPI only down to 5.3% — a bit of a bummer for the markets. So, after a few weeks of watching mortgage rates move generally higher, we were eagerly awaiting the Fed’s decision – and they did not disappoint. After 10 consecutive hikes, the Fed opted to hold the Fed Funds Rate steady at between 5.00% and 5.25% – for the dovish among us, a “pause” and for the more hawkish folks, a “skip”. By the time the announcement hit the wire, the markets had largely priced in the ‘no decision’, which left the pundits looking for more to talk about… and they found it in the form of the Fed’s quarterly dot plot chart – a chart that surveys the broader group, collecting each governor’s rate expectations for the remainder of the year. The chart indicated 12 of the 18 Fed governors anticipated at least 2 more hikes this year. When asked about this, Fed Chairman Jerome Powell replied that the dot plot is simply their best guess of where things will go and what will be required to achieve their target average inflation level of 2%. However, Powell also acknowledged that the Fed’s actions to date have not had the impact they might have otherwise hoped it would, stating “Inflation has not really moved down. It has not reacted much to our existing rate hikes. We’re going to have to keep at it.” So a bit of a mixed bag with the FOMC meeting, leaving a number of analysts with the sense that rates may be higher for longer than previously anticipated. With so much uncertainty bubbling around the market, its important to understand the strategies available to help mitigate the impact of higher rates. There are no silver bullets, but if you are curious – give me a call, I’d be happy to chat about the full scope of what can be done!
For some good news – active inventory for homes in the Denver Metro area has continued its steady climb and we hit 5,228 homes on the market as of the end of May. This is just over a 13% increase from April. New listings, pending contracts, and closed transactions have each gone up month-over-month as well, but overall market activity continues to track 25-30% behind where we were at this time last year. Higher interest rates and economic uncertainty are major factors in the reduced activity, with constrained budgets and the opportunity cost of leaving behind a low interest rate looming large. That said, those buyers and sellers who are still in the game, are clearly adapting to the new market. Buyers are taking a more measured approach, reviewing their choices before making an offer and seeking out situations where they feel they can get a ‘deal’ (on the right home). Sellers are also a little more rational – recognizing the importance of setting the price correctly, acknowledging when work needs to be done, and understanding that they may need to be open to negotiating additional seller concessions in order to get to the closing table. Having a strategy in place and knowing your options when making an offer are critical in this market. If you or one of your friends is thinking of making a move this summer, let’s chat – even with just a quick, high-level conversation, you might be surprised at what you learn!
Monthly Morsel: Beginner’s Guide to Car Camping
Car camping is a fun and flexible way to check out new places. This month I’m sharing an overview of how to get started, what to bring and websites to check out.
Recent Comments