· Mortgage Rates1 – The Fed meeting that concluded on Wednesday was the highlight of a week full of employment data releases. The ADP National Employment Report (Private Payrolls) came in a little stronger than anticipated, but the BLS jobs report was a little on the weaker side, with the unemployment rate edging up to 3.9%. Notwithstanding the mixed data, the message the market took away from Fed Chairman Powell’s remarks was that they do not see the Fed Funds Rate moving higher, and that the Fed will be taking near-term action to slow the pace of its balance sheet reduction. Viewed by the market as a net positive, our benchmark rate dropped to 7.125% (7.145% APR).
· Weekly Market Data2 – Another week, and another increase in the number of Active Listings. Now above 7,000, we are nearing the 2023 high of 7,513 Active Listings that we saw in mid-October. With roughly 1,400 New Listings, we saw another net gain of close to 250 homes. Median Days on Market came in at 8 days. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – Increased competition this past week left us with only 43% of offers accepted, at an average of 1% over list price. While inventory is increasing, so is the number of buyers looking to buy. We see the current market as a tale of two sellers – if a home is priced well to start, we are seeing some pretty healthy competition with sellers in the drivers seat. If the initial listing doesn’t generate a lot of buzz, sellers seem to be moving to offer concessions pretty quickly, followed by price adjustments. What this means is if the home is in its first 1-2 weeks on the market, it is less likely you will be able to negotiate a discount, but the longer it has been on the market the more negotiation power you will have on your side. In addition, if the home makes it through the weekend without going under contract, a full price offer going in mid-week may be met with less competition (and a little relief from the seller).
· Market Trends – Dealing with a divorce or separation is an incredibly stressful time in anyone’s life! When it also involves buying, selling, or refinancing a new or existing home, understanding options can help alleviate the pressure. One of the biggest concerns that comes up is the ability to buy another property while still on the mortgage for the marital home. Fortunately, if there is a court order affirming that your (former) spouse is solely responsible for the payments, this debt can be excluded. This does not apply to non-mortgage related debt, which instead requires that you demonstrate that they have made twelve months of timely payments from their own personal account. On the income side, child support and alimony or maintenance income can be included with as little of three months of history with an FHA loan and six months of history with a conventional loan.
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 7.125%, and a P&I payment of $3,234. The Annual Percentage Rate (APR) is 7.145%, which reflects a lender credit of 0.078% ($374). 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 05/02/2024 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 04/25/2024 to 05/01/2024. 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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