· Mortgage Rates1 – It was a short week with little economic news being released to impact mortgage rates and our benchmark rate held steady at 6.375% (6.411% APR). Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, rose slightly and points to a weakening labor market. We also received the Case Shiller Home Price Index, which is the “gold standard” for appreciation, showing that U.S. home prices rose 0.6% in October; and are now up 4.8% from last year. There is a little bit of a lag due to the way the data is compiled, so we do expect that for the last two months of 2024 to back off of that pace, but we do expect home prices to end 2023 on a positive note.
· Weekly Market Data2 – As expected, the week of Christmas resulted in very few new listings (only 179), and only 24 of those went under contract. The total number of Active Listings continued sliding down to 5,201. Active Listings peaked the week of October 18th and have been on a seasonal decline over the past several weeks… if history is any indicator, we expect this trend to reverse direction with the turn of the New Year. Similarly, we had a slow week with only 478 closings and 432 homes going “Under Contract” (Source REColorado, all DMAR counties, this past week – Thursday to Wednesday).
· Columbine Team Insight – We also had a slow week of offers with only one being presented and accepted (on Christmas day no less!) at slightly below list price with a nice seller concession. As lower rates continue to hold, we anticipate activity to pick up substantially over the next 2-3 weeks as buyers shake off their holiday haze and re-focus on their homeownership priorities. And while buyers are stepping up to the starting line, it will be interesting to see if rates in the low- to mid-sixes are enough to entice sellers to list their homes and provide the much-needed inventory to meet the demand from buyers. We have significant experience in all types of markets and will be ready to help advise no matter what the New Year brings.
· Market Trends – The one thing that has been consistent over the past few years is volatility across both real estate and mortgage rates, with the pendulum swinging from low rates and an intensely competitive sellers’ market to higher rates and a more balanced market where buyers were able to negotiate selling concessions – it is starting to feel like the pendulum might be swinging back to favor sellers, particularly if interest rates continue to cooperate. In this sort of environment, it can be challenging for buyers to confidently make one of the largest purchase decisions of their lives. And that is why we have made it our mission to partner with our clients to “Engage, Educate and Empower” them to confidently make informed decisions on their real estate transactions. We strive to make purchasing a home an exciting and stress free (at least when it comes to the mortgage) experience that buyers are thrilled to share with their family and friends.
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 6.375%, and a P&I payment of $2,994. The Annual Percentage Rate (APR) is 6.411%, which reflects a lender credit of 0.014% ($67). 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 12/28/2023 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 12/21/2023 to 12/27/2023. 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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