Uncovering Hidden Income

Published April 19, 2024

We understand that the most popular time to look for a home is the weekend — after new listings have been published and weekend house hunting activities kick into high gear.  In support of this, we are available when you need us most and want to provide you with timely updates on the market to help you prepare for the weekend ahead.

·         Mortgage Rates1 – Looks like the cat is out of the bag.  With Fed Chairman Powell’s comments at a policy forum earlier this week saying that he was “no longer confident that inflation is moving toward the Fed’s 2% target,” what had previously been lurking in the background has moved into the spotlight.  Inflation does not seem to be moving in the right direction at the moment, and the Fed is willing to hold off on rate cuts until inflation data is confidently moving in their favor.  As a result, our benchmark rate edged up slightly to 7.250% (7.253% APR).

 

·         Weekly Market Data2 – Another week and another strong showing for new listings hitting the market.  Our data is showing 1,400 new listings for the week, and we have now exceeded 1,000 listings per week for each of the last eight (8) weeks.  As the pace of new listings picks up, we are seeing the available inventory also move higher, with Active Listings crossing the 6,500 level.  Median Days on Market remained at 8 days.  (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).

 

·         Columbine Team Insight – Acceptance rates continued to climb, with 57% of our offers going under contract, as both inventory and opportunity increased again last week.  Offers were accepted largely at or very near list price, with a noted exception at 10% over list price (likely intentionally priced low to stimulate demand), driven by heavy competition.  As we continue to see inventory rise, and as rates stay higher for longer, it is a great opportunity for buyers to jump into the market and get a great new home.

 

·         Market Trends – Did you know that there was another benefit to earning non-taxable income besides the obvious benefit of not needing to pay income tax?  If you receive disability pay, life insurance death benefits, child support, social security, alimony, or adoption allowances (among other items) it may be possible to “gross up” this income when qualifying for a mortgage.  The purpose of the gross up is to level the playing field across different income types.  The lender will multiply the non-taxable portion by 1.25x and use the resulting income (along with other income sources) to determine your total qualifying income.  When every dollar matters, this can make a difference in the purchase price for which a buyer can qualify.

 

 

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 7.250%, and a P&I payment of $3,274.  The Annual Percentage Rate (APR) is 7.253%, which reflects a lender credit of 0.159% ($763).  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 04/18/2024 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 04/11/2024 to 04/17/2024.   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.

We are excited to have the opportunity to work with you.  Don’t hesitate to reach out as you navigate the market, we’d be happy to help!

3773 E Cherry Creek North Drive

Suite 690

Denver, CO  80209

303.284.2592

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