DENVER — The biggest factor continuing to impact Colorado’s housing market is an upward trend in interest rates not seen in decades.
Colorado’s September statewide home sales report shows that rising mortgage rates are driving down sales, which have traditionally been weak, not only in the Denver metropolitan area but across the state, according to a report from the Colorado Association of Realtors. It showed that it was complicating the season.
Home sellers who have decided to forego their current low mortgage rates and jump into the housing market have had a more favorable experience for buyers in the past few years, but the current scenario is a first-time home buyer in Colorado. This continues to be a challenge for many people. in the Denver metro real estate market.
“Buyers now have a real opportunity to choose,” said Matt Leprino, a spokesman for the Colorado Association of Realtors. “You can spend an entire weekend looking at houses before they become available.” “So if you can afford it now, or the loan amount is very low, you’re better off now than you have been for years.”
Single-family homes for sale in Colorado are on the market for an average of 46 days, which is a 24% increase compared to the 37 days reported a year ago in September 2022.
According to the Colorado Association of Realtors Market Trends Report, the number of new single-family homes fell by nearly 12%, with 9,416 listings coming on the market.
Across Colorado, 5,402 single-family homes were sold in September, down from 6,975 reported in September 2022, according to the report.
While median home prices across the state were trending down slightly earlier this year, single-family home prices rose nearly 3% to $575,000.
The statewide townhome and condominium market also rose 2.6%, with a median sales price of $425,857.
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A closer look at metro Denver data shows that the median single-family home price increased 3% year-over-year to $620,000. Metro’s median sales price increase continued in August after following a similar downward trend in recent months this year.
Single-family homes were on the market for 34 days in seven counties in the Denver metropolitan area, a 17% increase from a year ago, according to the report. “It’s a little hard to understand that fewer homes are coming onto the market while inventory is increasing. Normally you would think that fewer properties would mean fewer options, but that’s not the case in Denver,” Leprino said. stated in the report. “Why? Demand. There were 14% fewer homes on the market this September than last year and 26% fewer than in 2021. This may sound like the familiar ‘not enough inventory’ conversation. But that is definitely not the case.”
For buyers trying to overcome higher interest rates, one way to save money is to ask the seller to buy out the interest rate in hopes that it will eventually go down. This could potentially reduce your monthly payments for one to two years.
Another option is to look for something called an assumable mortgage. That includes taking over VA or FHA loans with interest rates of 4%, 3%, or even lower, but that’s easier said than done.
“In most cases, if you’re looking to buy and you’re looking at prerequisites, you’re going to need to come to the closing table with cash or some form of secondary financing, perhaps a home equity loan or home equity line of credit. ” said Chris Burke, vice president of Mortgage Insights at Veterans United Home Loans.
The buyer will need to find secondary financing to cover the capital payment to the seller. In that case, the seller could lose access to VA or FHA benefits if someone else is using them.
How is your experience buying or selling in Colorado or the Denver metropolitan area? Email us at 360@denver7.com.
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