· Mortgage Rates1 – Not much new news this week on the mortgage front. Aside from residual impact from the ‘next level’ analysis of last week’s CPI data that highlighted shelter costs rising 6.0%, this week was focused on the release of the Federal Reserve Meeting Minutes and was punctuated with a weak 20yr Bond Auction. Without any ‘good news’ for bonds to rally around, mortgage rates continues their upward trend. Our benchmark rate ended this week at 7.000% (7.025%% APR).
· Weekly Market Data2 – Try as we might, Active Listings have not punched through the 5,000 level. Seems that each week, we see a bit more listings (969 this past week), but we also see a similar number of homes going under contract (897 this past week). This pairing off makes it hard for the headline inventory number to make a lot of progress, but perhaps slow and steady is the better way to go? We did see Median Days on Market drop down substantially (hitting 19 days), which tells us that a lot of the homes going under contract (and closing) are those that are newer to the market. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – We had another week of 100% of offers accepted as the competition softened with the recent rise in interest rates. Offers generally went out at list price, with minimum competition as opportunistic buyers scooped up more recently listed properties at or very near list price. While rates are higher than we would like, we are seeing success with savvy buyers who have had a chance to really consider their financing options and who are willing to jump into the market before it gets too hot with the understanding that if rates improve, refinancing to a lower interest rate is a possibility.
· Market Trends – Retired with limited income, but still looking to qualify for a mortgage? Don’t worry, it just takes a little planning to “create” income from your retirement accounts. If you are over 59 ½ years old and are able to withdraw from your retirement savings (401k, IRAs) without penalty, you can set up an eligible monthly retirement distribution that can be treated as income for loan qualification purposes. We’ll need your investment account statements to verify your balance(s), as well as documentation from your investment advisor to support the ongoing monthly distribution amount. Eligible distributions must begin before the first mortgage payment due date and will require proof of when the first payment will be distributed. While it might seem like it would be more difficult to qualify once you have retired, the inherent flexibility of determining your own distribution amount can actually make the process easier. As a note, you don’t actually need to be ‘retired’ to do this, you just need to be of retirement age with sufficient assets in your retirement accounts.
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 7.000%, and a P&I payment of $3,193. The Annual Percentage Rate (APR) is 7.025%, which reflects a discount fee of 0.063% ($302). 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 02/22/2024 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 02/15/2024 to 02/21/2024. 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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