· Mortgage Rates1 – Another holiday shortened week, but this one had a whole lot of jobs reports for the market to dig its teeth into. ADP and BLS reports showed a modestly better employment picture with slightly expanding employment, while the JOLTS report provided a bit of an offset with November job openings failing to match expectations. An added kicker came with the release of the Fed Meeting Minutes that cited ‘an unusually elevated degree of uncertainty’ – and when everything was said and done our benchmark rate stepped up slightly to 6.500% (6.522% APR).
· Weekly Market Data2 – If the week of Christmas had few listings, what would you expect of the week after Christmas that had us ringing in 2024? Yes, you guessed it – active listings sliding below 5,000, pending contracts that remained relatively flat at 437, and Median Days on Market for those homes that closed clocking in at 38 days. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – While offers remained low with only one being accepted at the list price (after a recent substantial price reduction), we have seen an increase in loan applications as potential buyers move past the holidays and are starting to get their ducks into a row. In many of our conversations with prospective buyers, we expand on the benefits of being on the front end of the market, and suggest a planning session any time the opportunity arises – investing the time upfront can help put buyers into a more confident mindset, which helps when it comes to understanding how changes in the market impact their homeownership goals.
· Market Trends – If you (or perhaps more specifically, your clients) are like most potential buyers, swiping through potential properties online has become a voyeuristic trip into the world of ‘what could be with lower interest rates’… but with the turn of the calendar, it is important to note that property taxes that are factoring into those estimated monthly payments are still based on 2022 tax assessments. As most Coloradans are aware, counties across the state reassessed property values last spring, impacting 2023 property taxes that will be due in 2024. The new 2023 property tax bills will start being released in a couple of weeks and since property valuations increased substantially, we should all expect property taxes to follow suit. To get a more accurate estimated monthly payment, be sure to pay special attention to whether the estimated taxes are based on the old 2022 figures or the new 2023 tax assessments. If you are one of ‘those’ people who would like to understand more about how property taxes work, Colorado’s Department of Local Affairs – Division of Property Taxation has published a great description of everything you could ever want to know – check it out at https://dpt.colorado.gov/
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 6.500%, and a P&I payment of $3,034. The Annual Percentage Rate (APR) is 6.522%, which reflects a discount fee of 0.194% ($931). 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 01/04/2024 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 12/28/2023 to 01/03/2024. 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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