· Mortgage Rates1 – Weaker than expected GDP growth data, together with higher than expected Personal Consumption Expenditures (PCE) data revived concerns about the potential for ‘stagflation’ (stagnant GDP with high inflation… thus, ‘stagflation’). This is only one data point, but it was enough to trigger a sell off in the bond market. While our benchmark remained at 7.250% (7.302% APR), pricing shifted from providing a lender credit to requiring a discount fee.
· Weekly Market Data2 – The number of Active Listings continues to grow, as New Listings outpace homes going Under Contract. Despite New Listings ticking down slightly to 1,375 homes, we still added a net 250 homes to the pool of available homes for sale. Median Days on Market popped back up to 10 days. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – This past week we had 56% of offers accepted, at an average of 3% over list price across a wide range of price ranges. Almost all offers saw competition, and with competition comes contract prices that are over the list price. While we are seeing more price competition in the market, we are not seeing buyers giving up their rights to inspections and/or loan availability. With the increase in inventory there are quite a few options, and those new options seem to be drawing the attention of buyers who have been in the market and stimulating a bit more activity.
· Market Trends – When qualifying for a mortgage a lender looks at three main items – (a) your credit score and monthly obligations, (b) your sources of income, and (c) the funds you have available for the down payment and closing costs. Fortunately, when it comes to finding the funds needed to close, there are many sources you can tap. Available funds often include sources such as savings/checking accounts, investment accounts, life insurance and vested retirement accounts. There are also options to take out loans secured by your retirement accounts or, if you own property, a home equity line of credit. Down payment assistance in the form of a 2nd lien or a grant may also be a good option. If you are fortunate to be in a market that supports seller concessions, you may even be able to have the seller help you cover closing costs and prepaid items. Identifying the sources of available funds early – some obvious, others not as obvious – will help ensure a smooth transaction and eliminate any unexpected surprises buying your 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 7.250%, and a P&I payment of $3,274. The Annual Percentage Rate (APR) is 7.301%, which reflects a discount fee of 0.289% ($1,387). 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 04/25/2024 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 04/18/2024 to 04/24/2024. 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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