It All Starts with Strategic Structuring…

• Mortgage Rates¹ – While we ended the week slightly better than where we started, and our benchmark rate is now at 6.75% (APR 6.828%) it was not a flat road.  The headline inflation number in the May CPI report showed a year-over-year declined from 4.9% to 4.0% (which was lower than the 4.2% expected), but the CORE CPI only decreased to 5.3%… which was a let down for the market.  Since CORE CPI is the Feds favorite measure of inflation and we are still far from their goal of 2%, the decision to hold steady on the Fed funds rate (after 10 straight hikes) was taken as a hawkish “skip” instead of a dovish “pause” – the distinction being that while they didn’t bump rates this week, they did suggest they expected two more hikes this year.  It took the market a couple of days to digest, but after some bond friendly jobs and economic activity data, we saw rates improve on Thursday, followed by a little retracement this morning.

• Weekly Market Data² – Spring may have gotten off to a slow start, but the start of the summer is looking a bit more promising with another solid week of new listings.  We had 1,334 new homes hit the market and our total number of active listings is now sitting at 5,537.  Half of the active listings have been on the market less than 30 days, but that means 50% have been on the market more than 30 days – and that spells opportunity.  Our Median Days on Market finally reversed course and is now up to 7 days.  (Source: REColorado, all DMAR counties, this past week -Thursday to Wednesday).

• Columbine Team Insight – It was another active weekend of offers and we saw a great success rate with 83% of offers being accepted.  Overall accepted offers were 2% below list price, highlighting the negotiating power buyers are currently enjoying.  We also thought we would highlight that one of the accepted offers involved a CRA-eligible home.  This means that the buyer was able to take advantage of an additional 1% pricing incentive and locked in a below market rate.

• Market Trends – When buying a new home, you already know that you need to care about the structural foundation, but did you know that your loan structure can be just as important?  How you structure your loan(s) can have a big impact on your qualification, including the interest rate you will pay, the amount of funds you need to close, and your ability to reduce your overall financing costs/payments over time.  It is particularly important when you are preparing to ‘move up’ from an existing home (regardless of whether you will sell it or rent it), as well as when your loan amount goes above the standard conventional conforming loan limit of $726,200.  Having the right mix of financing options (and knowing how to use them ) can make all the difference, and we are happy to model out different scenarios live with you to help you decide which is the best fit for your goals.

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 6.750%, and a P&I payment of $3,113.  The Annual Percentage Rate (APR) is 6.828% with a 0.038% discount fee ($182).  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 06/15/2023 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 06/08/2023 to 06/14/2023.   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.