Mortgage rates inched up this week, prompting a pause among some prospective homebuyers. However, there are compelling reasons why waiting might not be the most advantageous strategy. Let's delve into the data and trends shaping the housing market landscape. Impact of Mortgage Rate Changes Home shoppers are keenly attuned to fluctuations in mortgage rates, as evidenced by the recent uptick in the average for the 30-year fixed-rate mortgage, reaching 6.77%. This increase led to a 3% decline in mortgage applications for home purchases, according to the Mortgage Bankers Association. While even marginal changes in rates can influence purchasing power, borrowing costs have generally stabilized. Jessica Lautz, Deputy Chief Economist at the National Association of REALTORS®, notes that despite the weekly uptick, mortgage rates have followed a downward trajectory since fall 2023, now sitting a full percentage point below recent highs. Considerations for Prospective Buyers Waiting for mortgage rates to decrease may not yield significant savings. Even a slight decrease in rates may not substantially alter monthly mortgage payments, particularly as home prices continue to rise. With the median price of existing homes reaching all-time highs and projected to climb further, buyers face the challenge of navigating a market characterized by low inventory and persistent price pressure. Regional Trends and Market Dynamics While national averages provide insights into broader trends, it's essential to examine regional nuances. In the Denver and Front Range area, for example, housing market dynamics may differ from the national landscape. The region has witnessed an increase in new listings, signaling growing interest from sellers. Additionally, inventory levels have seen a slight uptick compared to the previous year, potentially offering buyers more options. However, this increased inventory is accompanied by rising mortgage rates, which could impact buyer demand and price dynamics. Implications for Sellers and Price Dynamics As sellers ease back into the market, the region has seen a steady growth in active inventory, albeit at a fractionally slower pace than in previous weeks. While this may provide buyers with more choices, it also raises questions about the balance between supply and demand. Furthermore, the sensitivity of homebuyers to higher mortgage rates is reflected in the increasing number of price reductions, indicating a cautious approach among consumers. Future Outlook and Considerations As the housing market continues to evolve rapidly, monitoring key indicators such as inventory levels, sales growth, and price reductions is crucial for gauging future trends. While median home prices have remained relatively stable in recent weeks, the impact of sustained high mortgage rates on price dynamics remains uncertain. Whether home price gains will persist in the face of elevated mortgage rates is a question that warrants close observation in the coming months. Bottom Line In navigating the current housing market, prospective buyers in the Denver and Front Range area, like their counterparts nationwide, must carefully evaluate their options. While waiting for lower mortgage rates may seem tempting, the broader market context, including rising home prices and shifting inventory levels, suggests that delaying purchases may not necessarily result in significant savings. By staying informed and adaptable, buyers can make informed decisions aligned with their long-term goals in a dynamic real estate landscape.

With the new year already a month in, we’re already seeing exciting developments in the real estate market. And, in this update, we'll take a look at where the market’s been, where it’s at, and where it appears to be headed in 2024. Where We’ve Been | National Housing Reflecting on 2023, we drew a comparison to the conditions in 1995. Why? Existing-home sales hit a record low of 4.09 million in 2023, mirroring the 3.85 million recorded in 1995. However, the main difference in this comparison is that the U.S. population has grown from 266.6 million (1995) to 336.0 million (2023), contributing to challenges in inventory and affordability. Back in 1995, there were 1.58 million single-family homes available for purchase. In December 2023, this number dropped to 870,000, and the months' supply decreased from 4.8 to 3.1 months. Again, considering our substantial difference in population, you can see how available housing inventory would influence affordability, mirroring a typical supply-demand model.  Affordability concerns were underscored by the median home sales price, soaring from $114,600 in 1995 to a historical high of $389,800 in 2023. Despite a difference in mortgage interest rates, a difference from 7.93% in 1993 to 6.81% in 2023, housing affordability indices, qualifying incomes, and mortgage payment percentages underwent significant shifts. First-time homebuyers faced increased challenges, with their share of the market dropping from 42% in 1995 to 32% in 2023, and the age of first-time buyers rising from 31 to 35 years. Despite these challenges, there is hope for 2024. Mortgage interest rates are on the decline, buyers are entering the market, and new housing construction is helping to increase available inventory. If these trends persist, we anticipate a more positive outcome for the housing market this year. Where We’re At | Local Housing Market (Denver & The Front Range) In the metro Denver real estate market, a notable shift in the relationship between supply and demand is evident as well. New listings increased by 15.2% week over week, and pending transactions surged by 20.7%. The Odds of Selling increased by 4.2% to 53.0%, indicating a positive trend. To achieve balance, we would need 23,177 total listings, putting us at 19.9% of balance. Showings increased by 14.5%, with a median of 21 days on the market. Rates Rates Drop Significantly on “Fed Day”, but Not Because of The Fed The Fed met on January 31st, and rates experienced a notable drop, though the drop is not solely attributed to The Fed’s actions. Economic data and headlines about banking troubles contributed to this shift. While additional gains depend on incoming economic data, things just improved for potential homebuyers who are rate sensitive. Where We’re Headed | What Local Lenders are Saying Local lenders are noting unexpected increases in client introductions, pre-approvals, and applications, indicating a potentially busy spring market. Now sure looks like an opportune time to ensure a strong pre-approval, understand the next steps, and prepare for competitive market conditions…or get out ahead of them. One of our local lender associates wrote,  "If January is any indication of what’s to come in the Spring Market, then HELLO FEBRUARY! I experienced an unexpected increase in client introductions, pre-approvals, and applications this past month that was very welcome but not typical for this time of year. This tells me that we are in for a busy spring, which means NOW is the time to prepare. Anyone considering, talking about, or looking to buy this year should reach out to ensure that they have the strongest pre-approval possible and that they understand and are comfortable with the next steps. I focus on informing clients through communicating and listening to make sure they are as comfortable and ready when the time is right. If you know anyone who would like to be informed, listened to, taken care of, and prepared to successfully close on a new home in this competitive market, please send them my way." Bottom Line When navigating the real estate landscape, it is always crucial to stay informed and prepared. If you have any questions or need assistance, we encourage you to reach out. There’s no sense in wondering and wandering on your own.

That’s a Wrap on 2023! This year was marked by low home value appreciation and slower than normal real estate transaction activity, and staggering high mortgage rates. In October, we actually saw homes trade at a slower rate than they did during the Great Recession. But November brought relief, and rates fell for about 6 straight weeks, then stabilized the last two weeks of the year to round out an interesting year in the real estate market. Mortgage Rates Wednesday, in fact, was the most interesting day of the past 2 weeks, but that's not saying much. The past 2 weeks have been the calmest for mortgage rates in more than a year with the average lender essentially unchanged since December 14th. Yesterday's excitement came in the form of a more normal level of volatility. It didn't hurt that the volatility happened to be in the direction of lower rates. With that moderate improvement, the average lender was still lending just barely at the lowest levels since May 2023.  The Impact of Rates on Affordability Deputy Chief Economist & Vice President of National Association of Realtors (NAR) Research, Jessica Lautz said, “In just 6 weeks of decline, this makes a considerable difference for a home buyer purchasing a $400,000 home. A monthly mortgage payment of $2,135 is a monthly savings of $166. This is considerable, and buyers who have been priced out may start to trickle back in. For homebuyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market. It should be noted that in the most recent months' data in the REALTORS® Confidence Index, 29% of the market is purchasing a home without the use of a mortgage. These buyers are likely indifferent to the mortgage market. Some are investors, but many are primary residence buyers who have built substantial housing equity amid home price gains. While some of these buyers may be local, others may be moving long distances to a more affordable area. For now, eyes are on the Feds statements, CPI, and the 10-year treasury to see what the end of the year holds for mortgage interest rates. For those interested join NAR's Real Estate Forecast Summit on Dec 12 for a more in-depth forecast.” Existing Home Sales In November, the housing market witnessed a turnaround as existing home sales, which had experienced a downward trend for the past five months, increased by almost 1% compared to the previous month, reaching an annualized rate of 3.82 million units. It's worth noting that these sales figures only partially capture the significant decline in mortgage rates over the last two months, suggesting the likelihood of even more robust numbers in the upcoming months. The national median sales price for November stood at $388,000, reflecting a 4% year-over-year increase, according to NAR. Compared to Last Year This time last year there was a significant decline in mortgage rates as well. Between late October 2022 and early February 2023, the average 30-year mortgage rates decreased by approximately 1.3% (130 basis points). This reduction played a crucial role in the impressive 14% month-over-month improvement observed in existing home sales in February 2023. “Interestingly, the decline in mortgage rates this year has been more substantial (1.5% or 150 basis points) and quicker (within a span of 2 months) compared to the previous year. According to Matthew Graham of Mortgage News Daily, it has been labeled as "the biggest drop in a 45-day window that we've ever measured."” NAR’s Chief Economist, Lawrence Yun seems to agree: “The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November. A marked turn [upward] can be expected as mortgage rates have plunged in recent weeks.” What he means is that the majority of the home sales that closed in November went under contract in October, when rates were much higher. (It generally takes 1.0–1.5 months for a deal to close.) New Home Construction It’s been said that new construction will lead us (the US housing market) out of the inventory shortages and into affordability. While that may take some time, several years at least, it’s good to see new home starts, new home builder confidence, and overall site traffic all up in recent months: “With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look. With the nation facing a considerable housing shortage, boosting new home production is the best way to ease the affordability crisis, expand housing inventory and lower inflation.” — Alicia Huey, NAHB Chairman End of a Season? Winter just began but the year is concluding and the stale real estate market season may be as well. First-time buyers traditionally fare better in the winter, as there is less competition from families in the home-buying market. But as the year comes to an end, it’s quite possible that so too are the best opportunities. Following interest rates’ high water mark in October, market fatigue became widespread amongst most sellers and buyers. However, for those who remained in the market, enduring the slowdown in showing and listing activity, there were opportunities for buyers to negotiate with bedraggled sellers. Now with Christmas nearly a week behind us and mightily improved rates since the end of October, there are already signs of the market picking up steam heading into the turn of the new year. Bottom Line Homebuyers who’ve been priced out in the last year should find optimism through decreased interest rates in 2024. As for sellers, prices are predicted to moderate with most experts predicting a modest 2-4% increase in value, though some are calling for as much as 5+% if interest rates dip too low too quickly. Either way, it should be interesting. Give us a call to discuss how today's market conditions impact you.   If you’d like to read further on what 2024’s real estate market may hold, we’ve curated a short list of articles we think you may want to read before the new year ramps up next week: Home Sales Start to Rise Building Momentum for 2024 NAR Forecasts 4.71 Million Existing-Home Sales, Improved Outlook for Home Buyers in 2024

Seizing the Opportunity: Why Now Might Be the Perfect Time for Your Real Estate Move __________ Something big occurred just yesterday in the housing world--one of the biggest 2-day drops in interest rates we've seen in decades! On Wednesday, the Federal Reserve met and Chairman Jerome Powell spoke at the last Federal Open Market Committee (FOMC) meeting of the year. Ultimately, the Fed signaled that additional rate hikes in the near term are not expected and unlikely and alluded to a potential for 3 rate decreases throughout the coming year. While the Federal Reserve doesn't directly establish mortgage rates, these rates align with market expectations influenced by the Fed's decisions on short-term rates. The positive expectations evident in the Fed's Wednesday projections further emphasize this correlation. The bond market, of course, loved the news, and traders began pricing The Fed's anticipated actions and dovish tone into the interest rates. The result was that the prevailing rate dropped to the lowest we've seen since May 2023, making up for a lot of lost ground along the way. Mike Fratantoni, Chief Economist of the Mortgage Bankers Association said:  “Additional rate hikes no longer appear to be part of the conversation. It is all about the pace of cuts from here. This is good news for the housing and mortgage markets. We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market. We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations, following an extraordinarily slow 2023.” What does this mean for housing, and for you? Housing professionals expect further declines in mortgage rates and busier 2024 market. And it stands to reason. If you're considering buying a home, you can expect rates to likely move lower (more affordable). Since rates hit their recent peak of over 8%, homebuyers have gained hundreds of dollars in savings per month on mortgage payments due to the improved rates. In this video, released just this morning on YouTube, Brian Dewald, a local lending partner, spoke of a veteran family he helped close on a deal with a 30-year fixed rate of just 6.25%. Homebuyers currently in the market are finding that they're able to reach new thresholds of affordability or have homes, otherwise thought to be out of their price range, come back into focus for consideration. An Encouraging Winter Market  Since Thanksgiving, the mortgage industry has experienced a significant uptick in business, driven by homebuyers seizing the opportunity presented by lower rates. Concurrently, there has been a modest increase in new listing activity in recent weeks, providing additional choices for prospective homebuyers. In the current market, approximately two-thirds of existing mortgages still boast rates below 4%, and more than 90% have rates below 6%. This dynamic hampers inventory growth as homeowners are hesitant to part with their advantageous low-rate mortgages. However, a shift is anticipated in 2024, as noted by Lisa Sturtevant, Chief Economist at Bright MLS. Life changes, whether familial or financial, are expected to compel more homeowners to sell, even if it means relinquishing their favorable, much-lower rates. "With falling rates and heightened new listing activity, it is anticipated that the unusually busy December market will extend into January, as both buyers and sellers strive to gain an edge before the spring market," remarked Sturtevant in a recent statement. Cautiously Optimistic With moves this big, there is a risk of a corrective bounce. And progress will not be linear–2024 will continue to bring periods of ups and downs. Economically, despite strong retail sales and NY Fed Pres Williams’ attempt to squash the exuberance this morning, continued optimism prevails with the 10-yr dropping to 3.9% and the 30-yr fixed to 6.625%. Bottom Line Real estate decisions often take time to unfold. Yet, when a promising opportunity arises, it's advisable for prospective homebuyers to act promptly. These moments of advantage and opportunity in the real estate game can be brief, and seizing them could prove beneficial long-term.

The latest housing news for November 2023. In our professional opinion, here's what you need to know about today's real estate market conditions--despite what you may have heard: Mortgage Rates and Market Trends In a surprising turn of events, traders are not currently pricing in another rate hike for the first time in two years! Yesterday, we saw RATES at their LOWEST POINT in 3 months. The 10-year treasury's fall from 5% to 4.4% adds weight to the expectation of a downward trend in mortgage rates. So far in November the market has already experienced about a half to one percentage drop in mortgage interest rates. It’s difficult to forecast if this dip represents a long-term trend at this time, but homebuyers should welcome the improvement.This could make late fall and early winter an opportune time for home shopping before rates potentially fall into the 6% range, as they did yesterday. The market moves quickly and some of those gains evaporated today, but that’s the market. If rates were to dip into the 6s in the spring, there’s a good chance for a frenzy of new homebuyers entering the market, driving up competition for the already low supply of available homes to buy. Federal Reserve and Market Dynamics Despite conflicting signals, the market largely believes the Fed is done tightening monetary policy. Recent data on the consumer price index (CPI) sparked a major rally on Wall Street, with traders almost completely taking potential Fed rate hikes off the table. The flat reading on the headline CPI, along with a decrease in energy prices, contributed to this sentiment. Local Market Conditions The local market conditions provide interesting insights. With over 50% of units under contract experiencing price reductions and motivated sellers willing to negotiate, repair, and offer concessions, 2023 stands out as a year where sellers are driven by necessity. Traditional seasonal patterns indicate a rise in homes being withdrawn or expired from the market in the fourth quarter, setting the stage for likely increased demand and multiple offers in the first quarter of the following year. Market Trends and Insights Zillow's October Housing Report highlights a national trend of falling home prices month-over-month due to high mortgage rates and the usual seasonal housing cooldown. However, year-over-year, home values are still up in 34 of the 50 largest markets. Prices increased only slightly nationwide in October but the month’s hottest markets saw more substantial price growth due to high demand. Unfortunately, none of the Front Range’s largest cities made it onto the latest list (October 2023) of Top 20 Hottest Housing Markets or Markets Seeing the Largest Jump in Rankings (October 2023), though many of our neighbors in the West did (per realtor.com). Expert Predictions Expert predictions suggest a rebound in home sales in 2024, with Lawrence Yun, NAR Chief Economist, stating, "Existing home sales will rise by 15% next year." The market's expectation for the path of the federal funds rate has shifted, with potential rate cuts in 2024. Yun’s prediction for home sales is not to be confused with home values, though most experts expect that prices will increase next year, with most agreeing on a relatively modest increase. Bottom Line In conclusion, 2023 presents both challenges and opportunities in the real estate market. Understanding these trends is crucial for making informed decisions. Your reflection on the significance of data-driven facts will not only benefit your clients but also contribute to the overall health and stability of our market.   Remember there are always opportunities and advantages in any market, so please always feel free to reach out if you have any questions or if you're ready to explore the exciting opportunities in the current real estate landscape.

The latest housing news for October 2023. In our professional opinion, here's what you need to know about today's real estate market conditions--despite what you may have heard: Mortgage Rates at 8% Mortgage rates have reached 8%, a level not seen in 23 years. While this might be concerning, it's important to note that we've been hovering in the high 7% range recently. The big question on everyone's mind is when will rates start decreasing according to the experts? Many of the local lenders I work with and associate with seem to think that rates are nearing their top. The Federal Reserve, the monetary entity behind all the recent rate hikes wants spending to stop before they slow down rate hikes.  What's the Outlook? Fortunately, there is hope for relief in the near future. The latest inflation data suggests that the Federal Reserve's interest rate hikes may be working to combat inflation, which is a positive sign. However, the Fed is not expected to increase the interest rate at the next meeting. The reality is, when trillions are pumped into the system, inflation goes through the roof. Market Dynamics New listings have dropped by 6%, while inventory has increased by 11% to 6,629 listings. We're beginning to see inventory build--inventory currently stands at about 2.4 months of available supply. Notably, the median price continues to climb slightly (up 0.86% year over year), and the close to list price ratio remains strong at around 99%. Many sellers are still achieving their desired prices, with noted concessions, but buyers are becoming more assertive and winning negotiations. The 5 D's Yeah but are people still moving? The “5 D's”--those moving out of necessity--is a significant driver of the housing market. While prices haven't dropped significantly yet, increased rates have decreased demand, potentially impacting prices. However, low inventory is a complicating factor in this equation which is currently underpinning values, keeping them from substantially decreasing. We're closely monitoring the situation as inventory is finally increasing…slowly. Ownership and Foreclosures What's keeping the market going? Currently, 38% of homes in the U.S. are owned without mortgages, while 62% have mortgages. Importantly, 90% of those with mortgages have rates under 6%, and 80% have rates under 5%. Foreclosures have increased by 34%…but they're coming up from historic lows. The situation is not as extreme as it may seem. National foreclosure rates are at 3%, but in Colorado, they're just 1.7% and forbearances are becoming a thing of the past. Don't let the news tell scare you into thinking the worst, without knowing these facts. Strong Foundational Market Elements  Further expounding on the comments above, the market is supported by a substantial $31 trillion in home equity. Most homeowners have an average of 71% equity, and many have seen their equity grow by 45% in the post-pandemic boom. These facts provide stability and opportunities in our market, despite the current volatility in mortgage rates and perceived tenuous nature of the market. Seasonal Opportunities We are currently experiencing the traditional seasonal slowdown in the market. In some ways, seeing seasonality in the marketplace is welcome because it’s been predictable in the past (pre-pandemic), and always has presented opportunity for homebuyers.   For today's buyers there is also opportunity. Although there's less inventory of homes from which to choose, there are also fewer buyers to compete with. Historically, we've seen deals and negotiations pick up during this season.    For sellers, we advise pricing properties reasonably and ensuring they're in tip-top shape for listing. Sellers should anticipate that while price reductions aren't always expected, when a property is priced correctly, most buyers who are getting loans will need a mortgage rate buydown (also known as a seller subsidy) to make the montly payment work in today's near-8-percent mortgage rate environment. For more information on mortgage rate buydowns click here. The Silver Lining Despite hitting 8% last week, mortgage rates dropped ever so slightly back into the high 7's recently. That's not much, admittedly, and many buyers are waiting for a more substantial drop, but this may prove costly in the long run. Lower rates are expected to attract more buyers and potentially drive up home prices. An estimated 5.5 million prospective buyers could enter the market if the rates fell by a percent and double that number if rates fell by 2 percentage points. Competition would be beyond fierce if those numbers came to fruition, and if that happens, you've seen what happens to prices. Not to mention, the winter season typically brings more concessions and price drops, making it an excellent time for buyers to make a move in the current market. Ask us how you can get pre-approved with one of our preffered lenders. Whos' Buying? In the current market, three prevalent groups are cash buyers, first-time buyers, and circumstantial buyers and sellers (e.g., due to death, divorce, job changes). Cash buyers are not as affected by rising rates, seeing this as an opportunity. First-time buyers recognize the power of real estate as an investment and hedge against inflation. Life circumstances and investors continue to drive transactions. Ignoring the Noise Amidst the ongoing chatter about rising mortgage rates, it's essential to remember that predictions have often been wrong this year. Pay attention to time in the market rather than trying to time the market. Seek advice from trustworthy individuals with real experiences. Real estate and the stock market have historically been wealth-building assets over time. Quite honestly, if you look at who's positioning themselves in this market, its the investors who are still actively seeking opportunities. So you might ask yourself, what do they know that keeps them buying in today's market that I don't know? Bottom Line While the market is facing rising mortgage rates, there's always someone finding opportunities. We're here to guide you through these market conditions so you can confidently make informed decisions.    Please don't hesitate to reach out with any questions or for personalized advice--that's precisely why we're here.

Wait, so why would "ecnouraging inflation news" have to be endured? Good question. The answer isn't simple. Normally mortgage rates follow inflation. And when we've seen improvements in the inflation data we're all following, the markets should love that news and rates should come down. They didn't this time despite a 2-year low. Can we answer that question? Click to watch and find out...

If you're watching the market too closely, you may be doing a little fence sitting. There's nothing wrong with that. Stay informed, then jump when it's time to jump. With the Fed recently pausing interest rate hikes--it's been 15 long months--this might be that opportunity to jump. So will you? The Federal Reserve's Pause in Interest Rate Hikes The Federal Reserve recently announced their decision to pause interest rate hikes for the time being. This decision has been met with mixed reactions in various markets, but overall it is seen as a positive development. However, oddly, the reaction to inflation receding should have been positive for interest rates, yet the markets' reactions has seen mortgage rates tick up, then stabilize towards the end of last week and into this week. What's the deal? Normally mortgage rates love decreasing inflation. Market Update The real estate market has been experiencing a slow down until recent months. Home sales had slowed and inventory has decreased in many areas of the country. However, despite these challenges, the market remains stable. Prices have not seen a significant decline and are actually starting to inch back up. Low inventorys and high demand for those fewer available homes are sure to keep prices high. The Pause in Interest Rate Hikes Overall, the Federal Reserve's pause in interest rate hikes is seen as a positive development for the real estate industry. Interest rates directly impact the affordability of homes for buyers. Higher rates mean higher monthly mortgage payments, which can make homes less affordable for many people. The pause in interest rate hikes means that buyers will have more time to take advantage of low rates. In addition, the pause in interest rate hikes could also stimulate the market. Lower rates mean that buyers can afford more expensive homes, which could lead to an increase in home sales. This could help to reduce inventory and stabilize prices. What This Means for Buyers For buyers, the pause in interest rate hikes means that they have more time to take advantage of low rates. If you are in the market for a new home, there are advantages to start looking now. With low rates and a stable market, you have more options and more time to find the right home for you. What This Means for Sellers For sellers, the pause in interest rate hikes means that there is still demand for homes. While the market may be slower than the last few years, demand is stout and the summer heat (after a lot of rain) isn't keeping buyers from still looking for the right home. Pricing your home appropriately and working with an experienced real estate agent can help you sell your home quickly and for the best price possible--and I know a guy. Bottom Line Overall, the Federal Reserve's pause in interest rate hikes is a good news for the real estate market. And while the Fed is taking a break from raising interest rates, there are some real advantages in the marketplace for buyers. Once rates drop, and they surely will someday, inventory will get squeezed from buyers jumping off the fence and snathcing up reamining housing until sellers get onboard. Will you still be on the fence when rates improve or will you be counting your equity gains from your new backyard watching all the fencesitters?