- Mortgage Rates1 – Finally some good rate news! With President Biden and House Speaker Kevin McCarthy reaching a debt deal last weekend (at least in principle), the bond market has been reacting favorably and our benchmark rate has dropped back down to 6.625% (APR 6.720%) this week. The market’s focus will now shift to the Fed, and whether they decide to raise another 25 bps at their June 13-14 meeting or not – strong employment numbers this week has the market leaning toward another bump up, but the CPI data expected to be released on June 13th could be a deciding factor.
- Weekly Market Data2 – Active listings hit 5,000 this past week, but the number of new listings dropped by over 20% to 967, suggesting that inventory may be peaking for the time being. Sellers weren’t the only ones slowing down, as the number of new listings that went under contract in the first week also dropped – down to only 23% as buyers were clearly sitting out for much of the Memorial Day weekend (basking in the glorious weather, no doubt). This slowdown in activity is normal at this time of year and presents a great opportunity for those buyers who stay focused. Our Median Days on Market (for those homes that closed) held steady at 6 days. (Source: REColorado, all DMAR counties, this past week -Thursday to Wednesday).
- Columbine Team Insight – It was a slow weekend of offers with what seemed to be limited competition – resulting in 67% of offers being accepted. Of the offers that were presented, several were substantially below list price, reflecting buyers’ increased confidence and an increased willingness/ability to negotiate. Dust off your temporary rate buy down purchase contract language, we may see seller concessions back in vogue before we get too deep into summer.
- Market Trends – With Memorial Day weekend behind us, it is a great time to focus on your house hunting strategy. Inventory is up, buyer activity is down, and rates have taken a turn in the right direction. With over 75% of homes sitting on the market for more than 7 days there is an opportunity to start negotiating with sellers again. Remember that while it may seem attractive to offer a lower purchase price, buyers might get more mileage from an equivalent seller concessions – allowing them to cover out of pocket closing costs and prepaid items (as well as those temporary rate buy down programs).
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 6.625%, and a P&I payment of $3,073. The Annual Percentage Rate (APR) is 6.720% with a 0.077% discount fee ($370). 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 06/01/2023 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 05/25/2023 to 05/31/2023. 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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