You’ve Heard of PIWs and ACEs, but what about a PDR?

• Mortgage Rates¹ – Rates ticked up again this week and our benchmark rate is up slightly from last week at 7.250% (APR 7.347%).  It was another BLS jobs week (which hit expectations), and the ADP employment report for July came in much higher than expected at 324,000 jobs created – materially higher than the +/- 190,000 expected.  A continuing strong economy works against the Federal Reserve’s goal of decreasing core inflation, and so the bond market reacted negatively to this latest round of economic data.

• Weekly Market Data² – We saw inventory continue to increase for the 20th week in a row, and we now have 6,225 Active Listings on the market!  Sellers came through, offering up 1,077 new homes for buyers’ consideration, but only 220 of them went under contract in their first week.  The market has continued to slow and Median Days-On-Market popped up to 11 days on market – we haven’t seen Median Days-On-Market hit double digits since the beginning of March.  (Source: REColorado, all DMAR counties, this past week -Thursday to Wednesday).

• Columbine Team Insight – We had 100% of offers accepted this past week, with most at the list price or slightly below.  There was minimum competition, and our buyers were able to get the homes they wanted.  If you happen to be one of the many people who either have a low down payment, sale contingency or other situations that call for special negotiating talent, now is the time to take advantage of a slower market where sellers are willing to entertain these “less than perfect” scenarios.

• Market Trends –  If you have found value in reaching out to your favorite mortgage broker (IYKYK) to get the inside track on whether a property might be eligible for a PIW (Fannie Mae’s ‘Property Inspection Waiver’) or an ACE (Freddie Mac’s ‘Automated Collateral Evaluation’) Appraisal Waiver, you’ll want to pay attention.  As part of their ongoing effort to reduce lending costs to borrowers, the GSEs have added another acronym into the mix:  a PDR (‘Property Data Report’).  Importantly, this new hybrid option indicates that the proposed value has been accepted, but the loan file is subject to additional data collection with respect to things like bed/bath count, square footage, and interior/exterior photos.  Because the data collection does not result in a value (remember, the value has already been accepted), the report can be prepared by a trained property data collector instead of requiring a licensed Appraiser (and the associated Appraisal Management overhead).

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 7.347% with a 0.029% lender credit ($139).  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 07/20/2023 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 07/27/2023 to 08/02/2023.   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.