· Mortgage Rates1 – A glimmer of positive news on the mortgage front this week. A slight downward revision to Q4 GDP that put us at a 3.2% annual growth rate helped temper concerns about inflation. Together with PCE data (Personal Consumption Expenditures) that came in basically in line with market expectations (also with a slight downward revision to December), the market decided to stick with a ‘glass half full’ attitude. Our benchmark rate ended this week at 6.875% (7.003% APR).
· Weekly Market Data2 – As we’ve been expecting, Active Listings finally surpassed the 5,000 unit level, with another week of modestly higher listing activity. Increases in both new listing activity (1,018 new listings) and homes going under contract (985 homes) was enough to get us over the hump. We also feel like the relative balance is suggestive of a healthy market that is trending in the right direction for this time of year. Median Days on Market came in fundamentally unchanged at 18 days. (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – This is the third week in a row that we’ve seen 100% of our offers being accepted, with buyers being able to get their target homes under contract without giving up the farm. Overall, the accepted offers averaged 2% over list price, but that comes with a combination of over list, at list and below – it was completely house dependent. With this sort of dynamic, guidance from an experienced real estate agent is critical for getting under contract at the right price.
· Market Trends – Applying for a mortgage requires that you provide certain pieces of personal information, including obtaining a credit report. With loan application volumes down more than 50% from pre-pandemic levels, the Credit Bureaus (Experian, TransUnion, Innovis and Equifax) have turned to telemarketing companies as a way to offset lost revenue. Believe it or not, the credit bureaus sell prospective borrowers’ information that they collect to virtually anyone who will buy it – and many of those actors view mortgage loan applicants as prime targets for credit products. As the mortgage market has shifted over the past few years, the practice of purchasing these “trigger leads” has grown dramatically and there is not a limit on how often this information can be sold and re-sold – which is why it results in borrowers receiving a nearly constant barrage of calls and text messages the day after their credit pull. To give you a flavor, a recent ‘rush’ prequalification client of ours who did not have time to allow the opt-out to take effect received 100+ voicemails… in one day. Those ‘telemarketing’ loan officers have a deep playbook of strategies to entice borrowers to respond (including some that rely on blatantly false and misleading statements to lure people in). To protect your buyers from this onslaught, we routinely share specific information that allows our clients to opt-out of those programs. We suggest doing this as a first step in getting prequalified for a mortgage since it can take 3-5 days for those changes to take effect. By being proactive, we give our clients the opportunity to remove themselves from pre-screened offers (which includes both telemarketing and direct mail) and, at the very least, we are able to give them a heads up so they know what to expect in those situations when time is of the essence.
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 6.875%, and a P&I payment of $3,153. The Annual Percentage Rate (APR) is 7.003%, which reflects a discount fee of 0.126% ($605). 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 02/29/2024 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 02/22/2024 to 02/28/2024. 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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