· Mortgage Rates1 – We had a few economic reports this week, as well as the Case Schiller Home Price Index. Starting with home prices, we saw an increase of 0.7% in September, and are now up 3.9% from last year. On the economy, the second reading of Q3 GDP (GDP figures are routinely revised as more data becomes available) showed that the US economy grew at a 5.2% annualized pace, which was hotter than the estimates of 5.0%, and the PCE (Personal Consumption Expenditures) showed that inflation was flat in October, with a year over year decrease from 3.4% to 3.0%, which was in line with expectations. Rates continued to slowly drift down another notch and our benchmark rate came in at 6.875% (6.924% APR).
· Weekly Market Data2 – As is the trend at this time of year, Active Listings continued to decline slightly to 6,614 homes. As you might imagine, our weekly data was impacted by the Thanksgiving Holiday, with Closed Sales hitting a new low of only 365 closings and New Listings coming in at a meager 329 new homes, of which only 27 went under contract. Overall, there were only 462 homes that went under contract, which is consistent with the ‘Median Days on Market’ of 25 (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday). While we do anticipate a slight pickup in activity over the next few weeks before Christmas, it is a great time to take advantage of other buyers sitting on the sidelines until the new year.
· Columbine Team Insight – The lower rates have not gone unnoticed, and we had several buyers test the waters… successfully! The 100% acceptance rate was fantastic, and with all of our buyers negotiating some sort of deal (either a temporary rate buydown or a price reduction), the average of our accepted offers came in 3% below list price. There is still time to get into a new home before the end of the year; if you’d like to understand how the new lower interest rates impact your payment and the benefit of a temporary rate buydown, we would be happy to help.
· Market Trends – It is that time of the year when the FHFA (the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac) announces the conforming loan limits for the upcoming year. The new conforming loan limit for 2024 is $766,550 – up $40,350 compared to 2023’s baseline amount of $726,200 or an increase of 5.6%. For FHA, the new conforming loan limit is $498,257 –$26,227 higher than 2023’s baseline amount of $472,030, also an increase of 5.6%. Higher loan limits enable borrowers to utilize standard conforming loans, which typically have lower rates than high-balance conforming loans and less restrictive guidelines than larger jumbo loans.
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 6.924%, which reflects a discount fee of 0.112% ($513). 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 11/30/2023 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 11/23/2023 to 11/29/2023. 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.
Recent Comments