- Mortgage Rates1 – We had a relatively stable week until yesterday’s Initial Jobless Claims Report (which measures individuals filing for first-time unemployment benefits), fell 26,000 to 239,000 causing rates to increase to 6.999% (APR 7.044%). While a substantial drop after three straight weeks of claims above 260,000 spooked the market, analysts noted that it was a Juneteenth holiday shortened week… and since it was only recently made a federal holiday, it is possible the seasonal adjustments may have been thrown off.
- Weekly Market Data2 – On the sunny side of the street, active listings continue to rise and we are now at 5,750 with 1,261 new listings added this past week. It was a busier week with a slight increase in the percentage of new listings that went under contract (creeping up to 29%), and Median Days on Market for homes sold last week decreased back to 7. We do anticipate a July 4th holiday reversal next week, particularly since it falls on a Tuesday and many people will try to get away for an extended long weekend. As with most holiday weekends, if you are willing to keep looking, there will almost certainly be fewer ‘feet on the street’ and fewer competing offers. (Source: REColorado, all DMAR counties, this past week -Thursday to Wednesday).
- Columbine Team Insight – We saw some solid success with offers this past week with 80% being accepted. However, they did face competition and the average accepted offer was 2% over the list price. None of the offers waived deadlines or inspection, covered appraisal gaps or had post occupancy agreements; overall the terms were favorable to the buyers. The majority of offers also had lower down payments, and one even had down payment assistance – giving hope to those in a similar position.
- Market Trends – The Case-Shiller Home Price Index, which is the “gold standard” for market value trends, announced on Tuesday that home prices (on a National level) rose 0.5% in April on a seasonally-adjusted basis, after posting an increase of 0.4% in March. If the trend continues, home prices could finish the year up somewhere between 5% to 6%. While rates are not where we would like them to be, the cost of waiting and the impact of this lost potential appreciation could be significantly more than the benefits associated with the opportunity for a future lower interest rate. With the costs of a typical ‘at market’ refinance (e.g. no extra interest rate buy-downs / credits) tracking right around $3k, there is a clear benefit to buying now.
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 6.999%, and a P&I payment of $3,193. The Annual Percentage Rate (APR) is 7.044% with a 0.025% discount fee ($120). 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 06/29/2023 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 06/22/2023 to 06/28/2023. 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.
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