We are blazin’ through summer with hot days and some crazy weather tossed in there to keep things spicy! It’s hard to believe we are past the half-way mark for the year, but no worries – there is still plenty of time to get out and enjoy the summer’s long days and gorgeous weather (this is what living in Colorado is all about!). And if you needed even more reason to take some time out to relax and enjoy your favorite summertime activities – studies have shown that a little R&R is not only good for the soul, but also for productivity and motivation… so go ahead, take that quick weekend trip or week-long adventure – you can thank me later! ??
Market in a Minute
Interest rates have seen friendlier days, with rates touching highs not seen since last November. The driving force behind the recent surge has been the market’s expectations about what the Fed will do at its next meeting on July 26th. In June, the FOMC voted to pause their rate hikes after 10 consecutive increases. The minutes from that meeting indicated, as they have already stated several times before, that they are likely not done with increases to the benchmark rate because inflation has not yet subsided. This repeated message, in conjunction with June employment data (both JOLTS and weekly jobs reports) indicating stronger employment and business activity than anticipated, ultimately pushed the mortgage markets in a negative direction. That ‘bad’ news was offset last week by the June CPI and PPI numbers (two key inflation data reports) that each came in better than expected, with year-over-year CPI at 3.0% (a third of what the rate was one year ago), down from May’s 4.0% and the PPI posting a YOY increase of just 0.1% weaker (once again, ‘good’ for mortgage rates). This ‘relief rally’ came as the markets saw some renewed hope that the Fed may be closer to their inflation goals than previously thought. Assuming the Fed hikes one more time at its next meeting, the markets are hopeful that perhaps that will be the last of this cycle. The only fly in the soup is the strong labor market, which is still a concern and is being scrutinized by the Fed because a tight labor market mean higher wages, which can also feed the inflation cycle. In a market that could be nearing an inflection point, it is notoriously hard to predict which way interest rates are going to move on any given day, but with the right strategy, we can help you prepare and make the most of your current homebuying opportunities. Curious? Let’s chat about the options and what makes the most sense for your situation!
Active inventory in the Denver Metro Area continues to steadily increase with 6,070 homes on the market at the end of June. While this is not a huge number of homes, it is nearly twice the number of active listings we saw two years ago. This number would be higher if not for an unusually quiet spring selling season, where we saw 23% fewer homes listed for sale in the year-to-date period when compared to last year. One of the factors keeping sellers from listing their homes is the ‘cost’ to move for existing homeowners is higher than it has been in the past due to the interest rate differential between their existing mortgage and a prospective new mortgage – which means that the reason for moving needs to be more urgent – things like a job change or an expanding family, but not so much to simply improve the view from the backyard. From our seat, it does seem like the housing market landscape has changed and those buyers who are actively searching for (and making offers on) new homes are in a better position to negotiate, especially on properties that remain unsold after a week or so. Sellers will no doubt begin adjusting to a stabilizing market where the FOMO has faded buyers and where negotiating skill can make all the difference. Navigating this market can be tricky, but with an experienced and knowledgeable team behind you, we can help you get into a home with a strategy to optimize your mortgage over time.
Are you or someone you know thinking of making a move? Give me a call and we can have a quick high-level conversation to discuss what options and strategies are available – you may be surprised at just how much of a difference one call can make!
Monthly Morsel: Finding Positivity in Today’s Real Estate Market
For those of you who are closer to the real estate markets, I am sharing with you some positive news (which can sometimes be hard to find these days). I also want to encourage you to watch the online podcast, “Brian Buffini’s Bold Predictions 2023: Mid-Year Update” for some uplifting perspective on what is happening in today’s environment.
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