Front Range Real Estate Market Update, October 19, 2023

Yesterday, the national average interest rate for a 30-year fixed mortgage hit 8% for the first time since 2000.

Today, the average is just above 8%.

Many buyers can get a much lower rate, but the national average is a good indicator of how rates are changing.

As we’ve mentioned, rates are high, partly because of uncertainty about the FED’s plans for the future.

Whatever the reason for high rates, they have a significant impact on the national real estate market.

• In September, home sales slowed to a pace we last saw in 2010. 
• In 2023, we could see the fewest total home sales since 2008. 
• Mortgage applications have fallen to their lowest level in 28 years.

Locally, things are slightly different.

• 3,645 homes sold in September 2023, compared to 2,870 in September 2010. For comparison, 6,690 homes were sold in September 2020. 
• Here, there were fewer sales in 2010 than during 2008. In 2010, 39,586 homes sold. So far this year, 35,669 homes have sold. It doesn’t look like we’ll match the low of 2010. 
• We don’t have local data related to mortgage applications, but the drop is probably similar to national statistics.

If you’re downsizing, paying cash, or you’re a first-time buyer, it may still be a good time to buy. We’re seeing those buyers in the market.

It’s also a fantastic time to buy a brand new home. Builders are offering great financing deals and have lowered prices on new homes.

Since prices remain high due to low inventory, some buyers may have to adjust their expectations and make some compromises.

Buyers may need to consider looking in other parts of town, purchasing a home that needs some work, paying more than they want to spend, or getting a home without some of the features they may want.

We aren’t seeing as many “move up” buyers – those who want to sell and purchase a bigger or more expensive home. 

Many people are feeling what’s been called “the lock-in effect.”

These folks have locked in a low interest rate. In fact, most people with a mortgage have a rate below 6%. They don’t want to sell and are waiting for rates to come down.

We don’t have a crystal ball, but waiting may not be the best bet for all sellers since rates may hover around 8% for quite a while.

What we do know is that change is a constant, especially in the world of real estate. We’ll continue to keep you updated. If you have questions, don’t hesitate to contact us anytime. We’re happy to answer your questions.