It’s hard to believe we are already in February. January blew by and was ranked as the coldest and snowiest January in Denver in 16 years – Brrrrrr! And Punxsutawney Phil predicted that we have yet another 6 weeks of winter, so stay bundled up! February is the month of Love – and whether you celebrate Valentine’s Day or not, it is a nice reminder to show your love and appreciation to those you care about; so Happy (belated) Valentine’s Day – I appreciate each of you as a friend, client, and/or business partner, and I hope that with six more weeks of winter, you can get out there and enjoy some of the amazing winter activities that Colorado has to offer!
Market in a Minute
The Fed met at the end of January and announced another increase to their benchmark rate of 25bps, smaller than the 75bps we saw through most of 2022. The bump up in the Fed Funds rate was anticipated by the market, but when Fed Chair Jerome Powell acknowledged that inflation is, in-fact, declining, the markets clearly took it as a favorable sign (perhaps a bit prematurely :-o), despite his continued message that the Fed still anticipated future increases. Since that time, (almost as though Chairman Powell borrowed our crystal ball for his press conference), we have seen (a) employment data, (b) retail sales data, (c) CPI data and, most recently, (d) PPI (Producer Price Index) data that has all come in stronger than anticipated. Each new piece of data sent mortgage rates progressively higher (remember typically good news in the economy is bad for mortgage rates), with the cumulative effect of cancelling out the improvements experienced in late January and taking us back to where we were in late November – before the first signs of the labor market cooling off and Chairman Powell first signaled smaller rate hikes were to be expected going forward. Be ready for continued volatility; inflation can be a tricky issue, and until the ‘psychology of spending’ shifts broadly across the economy, I think we are going to be in for a few more ups and downs.
With buyers becoming more accustomed to a higher rate environment (remember, ‘higher’ is a relative term), more buyers are starting to jump back into the market and it seems they have come out swinging! Active listings ended January at 4,120, well above what was available this time last year, but still not enough to meet buyer demand. As we enter the spring market, competition for selected homes (think local – location, layout and price range) has definitely been ramping up. We saw some of the homes that were sitting prior to holidays finally go under contract and close this past month, which pushed the median days on market up to 34 days. As buyers begin to migrate back to offering over list price and including appraisal gap language, it is important they understand the impact those decisions have on their financial picture – in some cases it could mean bringing in a bunch of extra cash, and in other cases it might mean restructuring the loan and adding just a few extra dollars per month. Recognizing and leveraging flexibility where it exists is one of the many advantages of using an experienced, professional mortgage broker – we have the knowledge to know what is possible and can deliver that expertise when it matters – namely on the weekend when offers are being written (and accepted). If you or someone you know is planning on making a move, give me a call. I would appreciate the opportunity to go over your loan options and show you what possibilities are available to you!
Monthly Morsel: The Power of a Handwritten Note
In today’s world of instant communication by text and social media, it may seem like a handwritten note is a bit old-fashioned. But in this month’s eReport, I share some powerful reasons why you may want to start the practice of writing notes to those in your personal and business circles.
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